Odisha cabinet approves long-term bauxite linkage policy

  • | Wednesday | 21st February, 2018

BHUBANESWAR: The state cabinet on Wednesday approved long-term bauxite linkage policy that would help Vedanta’s Lanjigarh alumina refinery to source bauxite from state-owned Odisha Mining Corporation (OMC).Without a captive ore reserve, Vedanta faces constraints in ore supply as it has no captive block in Odisha. Since OMC has started mining operations for bauxite, the cabinet approved amendment of the long-term linkage policy to facilitate bauxite linkage,” said chief secretary A P Padhi after the cabinet meeting.The OMC has recently started bauxite mining from Kodingamali bauxite reserve in Rayagada district.According to the cabinet decision, 70 per cent of the total production will be available for long-term linkage and the balance 30 per cent stock shall be sold through national e-auction. It’s refinery in Lanjigarh has a capacity of 4 mtpa but only 25 per cent of the plant is operational at present. “Though Odisha has bauxite reserves of 1968.862 MT, the annual production was only about 9.2 MT,” said an official.The state government has asked OMC to expedite the statutory clearances for the blocks assigned to it. The company targets to produce only 1.25 million tonnes in 2017-18 due to raw material crunch, official sources said.“At present, iron ore and chrome ore are being facilitated through long term linkage policy to Odisha based industries.

BHUBANESWAR: The state cabinet on Wednesday approved long-term bauxite linkage policy that would help Vedanta’s Lanjigarh alumina refinery to source bauxite from state-owned Odisha Mining Corporation (OMC).Without a captive ore reserve, Vedanta faces constraints in ore supply as it has no captive block in Odisha. The company has invested more than Rs 50,000 crore in Odisha in two smelters, refinery and power plants,The two smelters are in Jharsuguda with a combined capacity of 1.75 million tonnes per annum (mtpa). It’s refinery in Lanjigarh has a capacity of 4 mtpa but only 25 per cent of the plant is operational at present. The company targets to produce only 1.25 million tonnes in 2017-18 due to raw material crunch, official sources said.“At present, iron ore and chrome ore are being facilitated through long term linkage policy to Odisha based industries. Since OMC has started mining operations for bauxite, the cabinet approved amendment of the long-term linkage policy to facilitate bauxite linkage,” said chief secretary A P Padhi after the cabinet meeting.The OMC has recently started bauxite mining from Kodingamali bauxite reserve in Rayagada district.According to the cabinet decision, 70 per cent of the total production will be available for long-term linkage and the balance 30 per cent stock shall be sold through national e-auction. The weighted average price derived from the national e-auction shall be the long-term linkage price.A committee headed by chief secretary A P Padhi would finalize modalities for supply of bauxite ore by OMC to the Lanjigarh alumina refinery.Lack of raw material had forced Vedanta to shut it refinery in December, 2012. The plant was reopened in July 2013 by arranging raw material from different sources. The company that requires at least 3 lakh metric tonne of bauxite ore per annum, imports raw material from various countries, said a company official.In 2013, the company had faced a jolt after all 12 gram sabhas, conducted following a Supreme Court order, rejected company’s bid to mine the bauxite reserve at ecologically sensitive Niyamgiri hill , home to the particularly vulnerable Dongaria Kondhs.“There will be of course some respite to the company due to the long-term linkage policy. But, everything depends on price of bauxite to be determined by the state government later,” the Vedanta official said.The cabinet also approved a proposal to explore more bauxite reserves in Odisha to create employment opportunities and to facilitate investment in mineral based industries. “Though Odisha has bauxite reserves of 1968.862 MT, the annual production was only about 9.2 MT,” said an official.The state government has asked OMC to expedite the statutory clearances for the blocks assigned to it. Wherever, the progress is not satisfactory, the government has asked the state PSU to surrender the block so that it can be auctioned.Accordingly, part of Karlapat bauxite reserve in Kalahandi district will be de-reserved from OMC and auctioned for expeditious exploitation of bauxite and to generate revenue, said an official source.

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