Vedanta may fail to source alumina from Odisha as Nalco stiffens stand

BHUBANESWAR: Vedanta Aluminium’s (VAL’s) plans to source alumina from Odisha could suffer yet another jolt since public sector National Aluminium Company ( Nalco) has ruled out the possibility of supplying its surplus alumina to any domestic unit.


The Anil Agarwal company, which has set up a smelter at Jharsuguda and alumina refinery at Lanjigarh, but is unable to operate the units due to lack of raw material had written to the Odisha government recently with an appeal to source alumina from Nalco. However, Nalco has categorically said any move to supply alumina to domestic units is against the longterm interest of the company.

Without naming Vedanta CMD Ansuman Das said: “We will do what is in our long-term interest. Supplying to any domestic entity is not in our interest. It is a matter of principle. We have taken a considered view on this. Instead, we would like to put all our effort in getting a coal block and set up a 0.5 million tonne smelter unit.” Das said when Nalco was set up in 1981-82, the plan was to export nearly half of its alumina output. “The entire infrastructure, the silos and railway infrastructure have been built with that policy in mind. If we have to supply to domestic units, we need to create a whole new and separate infrastructure.

At present, the turnaround time for rakes from Damanjodi to Vizag is 6-7 days and from Angul to Vizag the movement takes about 10-12 days. This will go up if we have to supply to domestic units,” he said.

In its recent letter to the state government, VAL had urged the state government “to impress upon Nalco to start selling or allow domestic smelters and SEZ units in Odisha to participate in tender for sale of alumina”.

The company had said this would save valuable foreign exchange since it is completely dependent on imported alumina to keep its Lanjigarh refinery running. While the unit reopened after a closure of eight months, it is forced to operate at only around 30-40% of its capacity due to dependence on outsourced bauxite. Referring to the state government’s resolution seeking reservation of at least 50% of mined out iron ore for statebased industries, VAL had sought a similar reservation of alumina for local units too. As per VAL’s estimates, Nalco could save up to $25 per tonne towards cost of transporting alumina from its refinery at Damanjodi to Vizag port, in terms of railway freight and port handling charges, among others.