Vedanta Aluminium Limited, a subsidiary of the London Stock Exchange listed multi-billion dollar Vedanta Resources group, on Thursday told the Odisha government it wants to temporarily shut down its alumina refinery in the state due to lack of bauxite by December 5.
“The decision is painful because it will affect the livelihood of nearly 7,000 people including 550 direct employees,” said Mukesh Kumar, president and chief operating officer of VAL.
Kumar pointed to mounting losses and said the company had informed the state labour department about the shutdown in a letter. “Our one-million-tonne-per-annum plant worth about Rs 10,000 crore has been running on loss since it started production.”
Kumar said since starting operations in 2007 at Lanjigarh in Kalahandi district, more than 500 km southwest of Bhubaneswar, the refinery was sourcing bauxite from Chhattisgarh, Andhra Pradesh, Jharkhand and Gujarat.
The company has not been able to get bauxite from Niyamgiri hill — home to nearly 10,000 endangered Dangria Kond tribals — adjoining the refinery despite an MoU with the state government in 2004.
“We ran the plant at less than 60% of capacity. Initially, the loss was around R2 crore per day, but now it has risen to R4 crore a day, taking the accumulated loss so far to Rs 3,000 crore,” Kumar said. Protests against mining in the Niyamgiri hill and problems in getting clearance from the Union ministry of environment and forests have hit the company’s plans.
A case relating to mining lease for Niyamgiri hill is scheduled to come up for hearing in the Supreme Court soon.
People fighting to save the home of Dangria Konds — portrayed in the western media as Na’vi from the Hollywood blockbuster Avatar — termed the company’s shutdown decision an eyewash. “The company is raising the bogey of job losses to arm-twist the central and state governments and influence the court,” said Prafulla Samantra, a petitioner against Vedanta in the Supreme Court.
Vedanta group, a mining and natural resources giant, had reported revenue of $14 billion during the last fiscal.