India's Vedanta Aluminum shuts refinery on bauxite shortage

Last Updated: Sat, Oct 13, 2012 16:30 hrs

BHUBANESWAR, India, Oct 13 (Reuters) - Vedanta Aluminium Ltd (VAL), India's largest aluminium maker, said on Saturday it has temporarily shut down its alumina refinery in Odisha due to lack of bauxite.

Bauxite is the key raw material to produce alumina. The refinery at Lanjigarh in Kalahandi district, about 450 kilometres from state capital Bhubaneswar, was operating at about 25 per cent capacity for the past three days, VAL President Mukesh Kumar told Reuters.

VAL is a unit of billionaire Anil Agarwal-controlled Vedanta Resources.

The refinery, which has been struggling for bauxite since it was commissioned in Aug 2007, informed the state authorities early last month it would close the plant on a temporary basis from 5th December.

"Due to non availability of bauxite we were forced to close down the refinery temporarily before our scheduled declared date we had no other alternatives," Kumar said.

"We shut down the operation to save the plant from further damage," he said.

Kumar however did not give an exact date when the operation would resume.

"We are not sure how much time it will take. We are making all efforts to arrange the bauxite" said Kumar, adding the operation at the plant would resume once the company could arrange a stock which would last 10-15 days.

The Lanjigarh plant requires 10,000 tonnes of bauxite a day to operate at full capacity of one million tonnes a year.

Kumar said bauxite was not available due to regulatory issues and monsoon conditions. Large scale bauxite exports from the country also contributed to the shortage, he said.

He said the Lanjigarh plant is designed for local bauxite, and availability of bauxite from Odisha only can ensure sustainability of the refinery's operation.

Kumar however said the shutdown of the refinery may not have immediate impact on VAL's aluminium output because the company is trying to survive on imports.

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