Vedanta looks beyond Niyamgiri to get Lanjigarh plant supplies
After 12 gram sabhas completely rejected bauxite mining in the Niyamgiri hills, Vedanta is now looking beyond the area to source raw material for its Rs 5,000 crore Lanjigarh alumina refinery in Odisha and is hopeful of securing an alternate mine soon.
"Niyamgiri was a very small deposit and they (the Odisha government) have promised us that they will give this and work on other deposits. They are working on other deposits and I am looking forward if they can take faster decision," Vedanta Group chairman Anil Agarwal told PTI.
When asked to comment on the complete rejection by the gram sabhas for mining at the Niyamgiri hills, Mr Agarwal said,
"This (Niyamgiri) is a small mine. Between government and the gram sabhas whatever has happened, I don't want to comment... As far as we are concerned, we need bauxite.
"If we get bauxite faster, we will be able to run the plant. Huge number of people are waiting and it is the right thing in India for revenue and for the employment."
"It does not matter, absolutely does not matter. We need to move forward," he said when asked whether he will mind if the bauxite comes from elsewhere other than Niyamgiri for the project.
The Lanjigarh alumina refinery and mining in the Niyamgiri hills have been surrounded by controversies since beginning and Vedanta and its partner Odisha Mining Corporation (OMC) have been battling out in different courts to keep the two projects alive in last few years.
"We created huge investment of Rs 50,000 crore in the aluminium sector. Now I am running it (the refinery) at one-third capacity. I leave it to you to see what we have created.
"I need bauxite, which the (Odisha) government has promised. In India, we have third largest bauxite reserves of the world and we have to use it for the human use."
During July-August this year, 12 gram sabhas, selected by the Odisha government for the referendum on mining in Niyamgiri hills, had rejected the proposal. The tribal villages, located on the hill slopes, are part of Rayagada and Kalahandi districts.
They were selected after a Supreme Court order of 18th April, in which it had directed the Odisha government to conduct meetings of gram sabhas for deciding whether mining will impact the religious, community and cultural rights of the villagers.
Due to the rejection, the alumina refinery is staring at an uncertain future currently as it does not have any permanent source for securing bauxite. It is currently operating at about 50-60 per cent capacity.
The Supreme Court order of April had come following a petition by the OMC, which had challenged a decision of the Environment Ministry to cancel stage-II forest clearance for mining at the Niyamgiri hills in August, 2010.
The Environment Ministry had cited violation of green norms in its cancellation order and had also hauled up Vedanta for going for expansion of the refinery without securing environment clearance.
The apex court, in its April order, had also directed the Environment Ministry to take a final decision on the stage-II forest clearance within two months of the decisions taken by the gram sabhas.
Technically, though, the rejection by gram sabhas does not affect Vedanta directly as the lease for mining at the Niyamgiri hills is in the name of OMC. Accordingly, OMC is supposed to provide the raw material to Vedanta's refinery.
One of Vedanta's subsidiary, Sterlite Industries (now Sesa Sterlite) had entered into a joint venture agreement with the OMC for supply of bauxite to the project after mining at the Niyamgiri hills.
In past two years, Vedanta has applied for 26 other bauxite deposits in Odisha due to the stiff opposition by the locals against mining and civil rights group. Its Lanjigarh refinery, operated by group firm Vedanta Aluminium, needs 3 million tonnes of bauxite to run the 1 MTPA alumina refinery currently.
The company has also been eyeing three Laterite mines, which is a minor mineral and has properties somewhat similar to bauxite, for running the Lanjigarh refinery. The mines are in Rayagada district.
In total, Vedanta has invested about Rs 50,000 crore in Odisha in the aluminium sector. Besides alumina refinery, the company has also invested on creating a 0.5 MTPA aluminium smelter and 1,215 MW captive power plant in Jharsuguda.
Vedanta also has plans to increase the alumina refinery capacity to 5 MTPA and aluminium smelter capacity to 2.6 MTPA in the near future.
