Vedanta likely to close Orissa alumina refinery from Dec 5

Written by Press Trust of India | New Delhi | Updated: Dec 4 2012, 07:13am hrs
Vedanta group is likely to close its one million tonne alumina refinery at Orissas Lanjigarh from Wednesday, a move which would impact about 7,000 jobs in the Eastern state.

The mining conglomerate, which runs the alumina refinery through an unlisted subsidiary, Vedanta Aluminium (VAL), had given a closure notice to the state government three months back citing severe shortage of bauxite as the primary reason for the shutdown. Suspension of operations (of Lanjigarh alumina refinery) is imminent from December 5 due to non-availability of bauxite. We can not help it, Orissa government is yet to give any assurance on bauxite availability. In its absence, running the plant is not sustainable, a senior company official told PTI.

He added that we had given a 3-month notice in September to the state government to close operations from December 5 and we are sticking to that date. For last several months, we have been running the plant at lower capacities and incurring losses.

VAL, in its closure notice to Orissas labour and industries department served on September 5, had said that running the alumina refinery is no longer sustainable unless Orissa government finds a solution for supply of bauxite.

The shutdown of refinery is likely to impact 2,500 workforce directly and 4,500 persons indirectly, he further said.

He, however, clarified that we are not thinking of any retrenchment at the moment.

The company has invested R50,000 crore in the refinery along with an aluminium smelter of 1.5 mtpa and a captive power plant.

Top officials of Vedanta group, including its chairman Anil Agrawal and VALs MD SK Roongta, had also met CM Naveen Patnaik and state chief secretary in the last three months to seek an alternate supply arrangement of bauxite.

We had constructed the refinery on the premise that bauxite will be sourced from the state itself. However, that promise is yet to be fulfilled, the Vedanta official said.