Vedanta group is likely to close its one million tonnes alumina refinery at Odisha's Lanjigarh from Wednesday, a move which would impact about 7,000 jobs in the Eastern state.
The mining conglomerate, which runs the alumina refinery through an unlisted subsidiary, Vedanta Aluminium Ltd (VAL), had given a closure notice to the state government three months back citing severe shortage of bauxite as the primary reason for the shutdown.
"Suspension of operations (of Lanjigarh alumina refinery)is imminent from December 5 due to non-availability of bauxite . We can not help it, Odisha government is yet to give any assurance on bauxite availability. In its absence, running the plant is not sustainable," a senior company official said.
He added that "we had given a 3-month notice in September to the state government to close operations from December 5 and we are sticking to that date. For last several months, we have been running the plant at lower capacities and incurring losses."
VAL, in its closure notice to Odisha's labour and industries department served on September 5, had said that running the alumina refinery is no longer sustainable "unless Odisha government finds a solution for supply of bauxite".
"The shutdown of refinery is likely to impact 2,500 workforce directly and 4,500 persons indirectly," he further said.
He, however, clarified that "we are not thinking of any retrenchment at the moment".
The company has invested Rs 50,000 crore in the refinery alongwith an aluminium smelter of 1.5 mtpa and a captive power plant.
Top officials of Vedanta group, including its chairman Anil Agrawal and VAL's Managing Director S K Roongta, had also met Chief Minister Naveen Patnaik and state chief secretary in the last 3 months to seek an alternate supply arrangement of bauxite.
According to Vedanta, the Lanjigarh refinery was meant to use high-grade bauxite, which is available in the mines of Odisha and runs on environment-friendly low pressure and low temperature technology.
"We had constructed the refinery on the premise that bauxite will be sourced from the state itself. However, that promise is yet to be fulfilled. Only one mine --Damanjori of NALCO, which is a PSU -- has become operational in the state in last 25 years," the Vedanta official said.
Alumina is the intermediate product to produce aluminium. Three tonnes of bauxite is required to produce one tonne of alumina and half a tonne of aluminium can be extracted from one tonne of alumina.
At about 1.7 billion tonnes, Odisha has