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May 26, 2017

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Vedanta shuts down Indian refinery over bauxite shortage

BHUBANESHWAR, India -- Mining giant Vedanta said Sunday it has temporarily shut its aluminum refinery in the eastern Indian state of Orissa due to a serious shortage of bauxite.

Vedanta Aluminium, India's largest producer of aluminum, gave no date for a restart of operations at its refinery in Lanjigarh, which has struggled to secure bauxite since opening in 2007.

"We have had to shut down the refinery for the time being due to acute shortage of the main raw material bauxite," Mukesh Kumar, the chief operating officer of the plant, told AFP.

"Unless we are able to have bauxite stock for at least 10-15 days it makes no sense to run the plant."

Vedanta Aluminium, a unit of Vedanta Resources which is controlled by billionaire Anil Agarwal, had earlier planned to halt production on Dec. 5 but was forced to bring the date forward.

"We have been running the plant at 25-30 percent capacity for the last 10 days. It was difficult to continue further," Kumar said. "We are trying to source bauxite from outside the state."

Vedanta needs nearly 300,000 tons of bauxite to run the refinery at full capacity every month.

Its plan for a joint-venture with the state-run Odisha Mining Corporation to extract bauxite from the Niyamgiri Hills in Orissa was struck down by the federal environment ministry in 2010.

The company has applied for government permission to mine alternative bauxite sources in the state but no decision has yet been announced.

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