In a fresh setback to Vedanta Aluminium (VAL), an associate company of the globally-diversified mining group Vedanta Resources, the environment ministry has put off the issue of terms of reference for the expansion of the company?s Lanjigarh refinery project. The issuance is necessary to conduct environment impact assessment (EIA) study for VAL?s alumina refinery project.

The MoEF took the decision in view of the review petition which VAL had filed before the Orissa High Court seeking reconsideration of the court?s decision to stop the expansion.

?It is proposed that the issuance of ToR be kept in abeyance till the disposal of the Review Petition by the High Court of Orissa,?? the MoEF notice said. Earlier in August, VAL had applied to the ministry for issue of ToR as a pre-condition to carry out the EIA study for its expansion project.

However, a VAL spokesperson clarified, ?We had put up an amended application for consideration of our expansion project at Lanjigarh in line with MoEF?s office memorandum, dated 16th November 2010, under which similar other cases have been duly considered. Since MoEF treated it as a fresh application, we filed a review petition in the Orissa High Court for appropriate clarification of their earlier order. The judgement of the High Court is reserved.??

Vedanta?s proposed expansion of its one million tonne per annum (MTPA) alumina refinery to 6 MTPA had been halted by the MoEF following a report from the Saxena Committee which castigated VAL for carrying out the expansion programme without any environment clearance. The ministry had issued stop work order in October last year. Later, the high court also rejected plea of Vedanta in July upholding the MoEF decision to stay the expansion of the alumina refinery in Lanjigarh.

Meanwhile, braving the odds, VAL is expanding its smelting capacity to 2.5 million tonness per annum by next fiscal through a phased investment of about R60,000 crore, according to SK Roongta, MD, Vedanta Aluminium. Talking on the sidelines of the sixth International Conference on Aluminium (INCAL) held in Hyderabad, he said that the present smelting capacity of Vedanta Aluminium is around 1.6 million tonnes per annum.

?We are already through with spending 75% of the total investment of R60,000 crore outlay for the expansion. We hope to complete all the pending works soon and enhance smelting capacity to 2.5 million tonne per annum,? Roongta, said. Apart from spending on large smelters, the investment is also towards setting up captive power plants at two locations in Orissa.

The primary concern for all Aluminium producers of the country is the delay in auctioning the coal blocks. ?We are sitting on large reserves of coal in this country. But we are not in a position to exploit the resources to extend benefits to the mining and metals industry. We hope that the auctioning of the coal blocks takes place at the earliest. In the meantime, we will evaluate all options of sourcing coal to expand our smelting capacity,? he added.

According to him, it is economically unviable and unfeasible for Indian companies to import coal. ?We can mine coal at the cheapest rate in the world, $10 per tonne through surface mining, and $35 per tonne through underground mining. These are still the cheapest rates. If we import coal, companies have to pay for the ocean freight; port handling charges and inland transportation, a model, which is not sustainable for the companies as well as the country in the long term,? he observed.

Vedanta Aluminium is part of a consortium of six firms, which have been allocated a coal block with an estimated reserve of 645 million tonne. Roongta hoped that the issues relating to Bauxite mining are resolved at the earliest. On its other projects, he said that there are two new major projects on anvil at Balco. The first of 4X300 MW power units would go on stream in the third quarter of FY12 and the other unit will be progressively commissioned thereafter. The new 3,25,000-tonne smelter would start production in the first half of the year 2012. Further, the company is also looking at acquiring overseas coal assets. ?We are awaiting the government policy on auction and then participate on auctions,?? he added.