Vedanta says plant closure won’t hit aluminium output

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Vedanta Aluminium’s plan to shut its alumina refinery in eastern India will not hit its aluminium output because it aims to treble imports of the raw material, a company official said on Thursday.

The company, part of billionaire Anil Agarwal’s Vedanta Group, intends to implement a temporary shutdown of its Lanjigarh refinery in Odisha state from Dec. 5 because of bauxite shortages, its president Mukesh Kumar said on Thursday.

India, the world’s fifth-biggest bauxite producer, has been limiting the issue of bauxite leases mainly because of local protests over land acquisition.

Vedanta has asked the government for help in obtaining bauxite supplies because mining plans have become mired in litigation and protests by residents. It has even called for a ban on bauxite exports.

“After shutdown of Lanjigarh plant we will be left with no option other than to meet full requirement through imports,” Kumar said, adding that it will need to buy an additional one million tonnes a year.

Kumar said that the softening of global aluminum plate prices would help the company to step up imports. Aluminium prices have been under pressure because of the slowing global economy.

Vedanta needs 10,000 tonnes of bauxite a day to operate the Lanjigarh plant at its full capacity of one million tonnes a year.

The refinery is currently operating at 70 percent capacity and supplies alumina to Vedanta’s Jharsuguda smelter in Odisha, which can produce 500,000 tonnes of aluminium a year.

India produces about 1.6 million tonnes of aluminium a year and consumes about 1.3 million tonnes. Aluminium demand in Asia’s third-largest economy is expected to grow by 7 to 8 percent a year, led by its power transmission, construction and automobile sectors.

The country’ aluminium pipe exports are expected to rise by 5 percent to 325,000 tonnes in the year to March 31, 2013.

Posted in Industry.