Alarm bells ring for Vedanta #goodnews for Tribals

MONDAY, 07 JANUARY 2013 00:13

The Vedanta Aluminium, which has invested a whopping Rs50,000 crore in its aluminium and power projects in the State, is now on the verge of total closure.

The future of around 7,000 families, who are directly and indirectly earning their livelihoods from the 1-million-tonne-per-annum capacity refinery at Lanjigarh, set up with an initial investment of $ 1 billion, is now uncertain. All assurances by the Government to provide bauxite for the refinery have come a cropper.

Plant’s COO Dr Mukesh Kumar confirms, “The cumulative losses from the unit have crossed Rs2,500 crore and the company has hardly any other viable option left.” The crisis has all the potential to scare off other investors in the State.

President of Lanjigarh Anchalik Vikas Parishad Shridhar Pesnia, who is in the forefront of the movement to save the refinery, says, “The closure of the unit will be a setback for the company, but for the people of Kalahandi it will spell total disaster. The area will slide back to the days of starvation, disease and abject poverty. Never will any other company dare to invest in this backward area. The fate of Kalahandi will be sealed forever.”

While the closure of the refinery, which represents the single largest investment in Kalahandi district, will roll back the long-term development efforts, it will also bring in a lot of hardship to the people who are employed there as well as those who earn a living because of its economic ripples.

Sujata Mohanty, employed with the plant’s HR department, pointed out, “The human cost of misery involved in the closure of the unit will be impossible even to calculate. As it is, people are facing difficulties in getting a job, and now the locals will have to migrate away from the State in search of livelihoods.”

Triggered by a landmark judgement of the Supreme Court in 2008 which had directed the company to pay 5 per cent of its profits or Rs 10 crore annually, whichever is higher, for tribals’ development, a lot of visible changes had taken place at the ground level. Shrikant Bohidar, who works in the CSR department says, “The company till date has invested more than Rs 170 crore on community development projects. Never before had this amount of money spent on developing infrastructure and livelihoods in Kalahandi. Schools, hospitals, scientific farming methods, shifting to cash crops, midday meal schemes, etc., will now be affected.”

Hari Majhi, a project displaced person currently employed with the company, is now deeply anguished. “My daughter is right now studying in the DAV school run by the company. What will happen to her future? We gave our land for the company, and now the company itself is closing down.” There are hundreds of people like Majhi whose children were enjoying the benefits of modern education in such a remote area.

What makes the situation extremely grim is the fact that in the last three decades not a single bauxite mine has become operational in Odisha. It, therefore, is an irony that while Vedanta’s refinery is virtually surrounded by about two billion tonnes of bauxite reserve, the company has to source its raw material from a cocktail of sources ranging from Gujarat, Madhya Pradesh, Chhattisgarh and Andhra Pradesh. Besides the exorbitant cost of hauling the bauxite from the far-flung States, even these sources have now dried up.

And there is another disturbing development that speaks volumes about the callous attitude of the Government. While on the one hand the Vedanta refinery has already shut, there is also a danger of its aluminium smelter located at Jharsuguda facing a similar situation. Right now, the smelter is resorting to imports of alumina which is not only costly but also involves an outflow of foreign exchange.

Yet on the other hand, the Nalco, which is virtually Vedanta’s next door neighbour, is busy exporting its surplus alumina and not releasing it in the local market. To make matters worse, the Nalco would, in fact, have realised more money had it sold its alumina in the local market. According to sources, the Nalco can easily make another Rs 250 crore annually simply by selling the alumina to domestic consumers like Balco and Vedanta.

Alarm bells are ringing not only for Vedanta but also for Odisha as this is bound to send out adverse signals to other corporates which are planning to invest in the State. The State Government seems to have woken up of late and is initiating steps to ensure that the Karlapat mine is allotted to the Odisha Mining Corporation (OMC). Sources, however, feel that Karlapat’s proximity to the wildlife sanctuary and elephant corridor is likely to make the task of getting the necessary clearances very difficult and time-consuming. Even if all goes as per schedule, it may not be possible to start mining from Karlapat within the next four to five years. By then, it might just become too late!

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Tribals protest against #Vedanta refinery, demand complete eviction of plant

By Tariq Abdul Muhaimin 12/6/12, Newzfirst

Bhubaneswar – Hundreds of tribals and farmers belonging to several villages and a spectrum of grassroots movements across Odisha on Thursday demonstrated at Lanjigarh, demanding the expulsion of an aluminium refinery owned by British mining giant Vedanta, located at the foot of Niyamgiri Mountain.

Vedanta, a company which by its name symbolizes the sacred texts of Hindu mythology, has been accused of showing complete disregard and disrespect to the sentiments of Dongria Kondh tribesmen who dwell below the Niyamgiri Mountain and consider it as sacrosanct by associating their livelihood to the blessings received from the sacred forest housed by this mountain.

Located at a distance of 600 kms from the state capital Bhubaneswar, Niyamgiri is a place of quiet beauty as the lush green forest which grows on its bed only echoes the sound of chirping birds, winds that blow across the hills and the sound that originates from the Aluminium factory at Lanjigarh.

However, the sound from the Vedanta Alumina refinery (VAL) at Lanjigarh completely subsided on Wednesday as the Chief Operating Officer (COO) announced its closure citing lack of raw material availability.

Lanjigarh refinery shut-down on Wednesday, but tribals demand complete eviction

“We have already started the process of shutting down the alumina plant from the morning. By evening, the one million tonne per annum alumina refinery would completely come to standstill,” Mukesh Kumar, COO of VAL, told reporters on Wednesday.

The plant’s shutdown comes following a three-month closure notice which it had given to the Labour Department of Odisha government on September 5. The notice was served on the grounds of non-availability of raw materials. The refinery needs at least 10,000 tonnes of bauxite everyday to keep the plant operational.

The plant had already witnessed a temporary shutdown in the last three months but was reopened again after a few days, following the availability of bauxite from states like Jharkhand and Gujarat.

Nonetheless, hundreds of villagers from 17 hamlets around the Niyamgiri who marched from their homes towards Lanjigarh on Wednesday to join the demonstration against VAL, demanded the complete eviction of the refinery.

“We are demanding that the refinery must be dismantled completely. It should be locked up and shifted to any other place. Even if the Apex Court delivers a judgment against the mining of Bauxite at Niyamgiri, we doubt that the plant will be shifted” activist Prafulla Samantara from National Alliance of People’s Movements told Newzfirst.

“They will continue their operations by getting raw materials from other states. We cannot allow this. The waters, the forest which is considered sacred by the Dongria and the biodiversity of Niyamgiri are all being affected. They will soon be finished if the plant stays here,” he added.

Tribals and farmers of grassroots organizations such as Niyamgiri Surakhya Samiti, Loka Sangram Mancha, Samajwadi Jan Parishad, and Sachetana Nagarika Mancha were part of this demonstration.

We are hopeful that SC will not allow mining here

In anticipation of the final Supreme Court decision which will decide the fate of the contest between the Aluminium refinery and the locals over the authorization to mine for bauxite in the hills, the ten thousand people who gathered at Lanjigarh to demand the lock-up of VAL, said “We are hopeful”.

The Apex Court’s decision on this ruling was repeatedly postponed and the final hearing took place on 3 December. The protestors were awaiting the decision, which they said would come out any time soon.

“We are hopeful that the Supreme Court will give a judgment in people’s favor. The plan to mine bauxite on the Niyamgiri Mountain will not succeed. At least we won’t let it succeed” Prafulla said.

The tale of Lanjigarh refinery

The Lanjigargh refinery was built at the base of Niyamgiri and assessed for environmental and social impact without taking into account the intention to mine the hill above for bauxite required to run the plant.

The mineral wealth lying beneath the slopes of the mountain had drawn Vedanta to Niyamgiri. Now, it wants to turn the hillside into a giant bauxite mine to feed its refinery.

However, obtaining permission to mine the mountain has been very difficult for the British giant Vedanta.

The previous ruling by Environment and Forests minister Jairam Ramesh in August 2010 prevented Vedanta from mining the mountain due to violations of environment and forestry acts.

The challenge to this ruling was mounted by the Orissa Mining Corporation, a state owned company with 24% shares in the joint venture to mine Niyamgiri with Vedanta.

Now, the Supreme Court decision which will decide if mining can be done on the Niyamgiri, is awaited.

Vedanta’s Alumina Refinery Shuts Down In Odisha

Unable to secure bauxite despite concerted efforts, the Vedanta group said it has shut down its alumina refinery at Lanjigarh in Odisha’s Kalahandi district
Vedanta's Alumina Refinery Shuts Down In Odisha

Picture by Reuters

Unable to secure bauxite despite concerted efforts, the Vedanta group on 5 December’ 2012 said it has shut down its one million tonne alumina refinery at Lanjigarh in Odisha’s Kalahandi district.
“We are forced to close down the Lanjigarh refinery due to depletion of stock of bauxite. Despite efforts over the past three months, we were unable to ensure sustainable supplies,” CEO of Vedanta Aluminium Mukesh Kumar told PTI over phone.
“For the last few days, we ran the unit at around 20 per cent of capacity incurring heavy loss,” Kumar said.
The bauxite stock was ‘almost zero’, a senior Vedanta official said.
The mining conglomerate, which runs the refinery of Vedanta Aluminium Ltd (VAL), had given a closure notice to the Odisha government on September 5 on shutting operations from December 5, citing severe shortage of bauxite as the main reason.
Stating that 10,000-11,000 tonne of bauxite was required per day for normal functioning of the refinery, Kumar said the company explored several sources outside Odisha, but failed to secure more than 3,000 tonne daily.
Though the company’s top management met Odisha Chief Minister Naveen Patnaik and chief secretary several times for bauxite for the refinery, no solution could be found, he said.
Voicing doubt over immediate revival of the plant, another company official said that the 75 mw captive power plant set up in Lanjigarh would also have to be shut down in view of the uncertain scenario.
A company official had said earlier that the shutdown of the refinery was likely to affect about 3,000 workforce directly and around 4,500 indirectly, although “we are not contemplating any retrenchment at the moment”.
The company has invested about Rs 50,000 crore in the refinery along with an aluminium smelter of 1.5 mtpa and a captive power plant in Jharsuguda.



#Vedanta to stick to December 5 deadline for closure of refinery

Sadananda Mohapatra / Kolkata/ Bhubaneswar Dec 03, 2012, 00:07 IST, Business Standard


Vednata Aluminium Ltd (VAL), which had given a three-month advance notice to the Odisha government for closure of its Lanjigarh alumina refinery from December 5 citing unavailability of bauxite, may not relent on its decision as there is still no solution to the raw material problems.

Though the company top including group chairman Anil Agrawal and VAL MD SK Rungta called on the state chief minister and chief secretary seeking alternate arrangement for supply of bauxite to the plant, there has been no progress in this regard making the shutdown of the plant by the given deadline an inevitable outcome.


“In the recent meeting between the state government and Vedanta officials, the government could not come out with a solution to arrange bauxite for the Lanjigarh refinery. The company has no other alternative but to shut down the plant from December 5 onwards,” a company official told Business Standard.


In its September 5 notice to the state labour commissioner and industries department, the company had said running the plant was no longer sustainable “unless the Odisha government finds a solution for bauxite supply”.

The company had closed the one million tonne per annum alumina refinery temporarily in October after all its bauxite stocks exhausted. It had reopened the refinery a week after ensuring bauxite supplies of about 40,000 tonnes from Bharat Aluminum Company’s (Balco) Kawardah mines in Chhattisgarh and about 92,000 tonne from Gujarat Mineral Development Corporation (GMDC).“There are no more stocks as of now nor do we have any hope to get raw material from anywhere else to run the plant smoothly,” said the company official.

VAL has invested Rs 5,000 crore in the Lanjigarh plant so far and incurred losses to the tune of Rs 2,500 crore during the past five years of its stunted operation.

The closure of the plant is expected to affect the livelihood of 6,500 people, including 550 employed directly, 5,000 engaged indirectly and 1,000 self-employed in and around the plant. VAL had formed a JV with the state-run Odisha Mining Corporation (OMC) for the supply of 150 million tonnes of bauxite, which included 78-million tonne reserves from the Niyamgiri hills.While bauxite mining in the Niyamgiri hills was prohibited by the Union Ministry of Environment and Forests (MoEF), there was no attempt by OMC or the state government to supply bauxite from other sources.

OMC has said its hands are tied down by rule of law since the agreement was meant only for supply from Niyamgiri mines, which is a matter of sub-judice currently. The miner has no large bauxite mine under its ownership as of


Vedanta shuts down Odisha refinery ahead of schedule #goodnews



13th October 2012 08:43 PM

Vedanta Aluminium Limited (VAL) Saturday temporarily shut down its refinery in Odisha, ahead of its Dec 5 scheduled closure, as it could not arrange for the minimum quantity of bauxite required to continue operations, a senior company official said.

“There was no other choice but to shutdown the plant because we could not arrange the required bauxite,” VAL president Mukesh Kumar told IANS. The plant will resume operations only when we arrange bauxite stocks for 10-15 days of operations, he said.

Last month, the company had informed the state government about shutting operations by Dec 5 but due to non-availability of bauxite it was forced to do so ahead of the schedule.

The one-million-tonne per annum alumina capacity refinery at Lanjigarh in Kalahandi district, about 500 km from here, had been operating at reduced capacity since its commissioning in Aug 2007.

In recent weeks the operation at the plant had reached to a critical level and in the past three days it was operating at about 25-30 percent capacity, Kumar said.

Kumar said although the company had been running the plant despite incurring heavy losses by sourcing bauxite from different states, the bauxite availability for the plant was nil since past few days.

Set up with an investment of $800 million, VAL requires three lakh tonnes of bauxite per month to run the refinery at full capacity.

Vedanta wants to mine bauxite from Niyamgiri Hills located near its refinery but its clearances are mired in litigations and protests by residents.

It has also applied for several other bauxite reserves in the state, but none of them have been materialised so far. VAL is an associate company of the London listed Vedanta Resources.

Vedanta may temporarily shut down Odisha refinery #goodnews



BS Reporter / Kolkata/ Bhubaneswar Aug 22, 2012, 00:11 IST
 Rapidly dwindling stock of bauxite at its refinery complex at Lanjigarh in Odisha’s Kalahandi district has forced Vedanta Aluminium Ltd (VAL) to downsize its capacity significantly.


And, with bauxite stock depleting to almost ‘zero level’, the refinery plant is barely able to run intermittent operations for the past two days after operating at 40-50 per cent capacity since August 1 this year.


 After being denied access to the bauxite deposits at Niyamgiri Hills by Union Ministry of Environment and Forest (MoEF), VAL wholly depended on bauxite sourced from other states to keep its refinery operation afloat at Lanjigarh.

 But supply glitches from have poured cold water over its plans, leaving the company high and dry. With sourcing of bauxite from other states becoming increasingly difficult, VAL may be left with no other option except going for ‘temporary shutdown’ of the plant, says a top official of the company.


“There is no bauxite to talk of. We have zero stock. The company is making all out efforts to source bauxite but things are not working in our favour. One of our major mines in Chhattisgarh which used to supply us 120,000 tonnes of bauxite per month has become non-operational due to expiry of mining lease. Mine operations of another smaller mine in the same state that supplied 60,000-70,000 tonnes per month has been impacted by rains,” said the official.


Of late, the company is unable to get bauxite from Gujarat Mineral Development Corporation (GMDC) as the company had not issued any tender recently. Besides, private miners in Gujarat are preferring to export their material instead of selling it in the domestic market because of better returns, the VAL official informed.


Bauxite mines in neighbouring Jharkhand and Andhra Pradesh were bogged down by regulatory issues and this has hit supplies, he added.


To run the one million tonne per annum (mtpa) refinery plant at full steam, VAL needs 300,000 tonnes of bauxite every month.


He clarified that there was no pressure piled by Vedanta Resources’ shareholders to shut the Odisha refinery as it was bleeding financially.


“There is no such pressure from the shareholders to close the Odisha refinery. Its true we have been running losses by importing bauxite from other states, but we have always strived to keep the refinery running,” he said.


Owing to its total dependence on externally sourced bauxite, VAL has hitherto incurred cumulative losses to the tune of Rs 3,000 crore.


“More than 7,000 people are employed directly or indirectly at the Lanjigarh refinery. We cannot allow the refinery to close, putting the future of so many people at stake. VAL is currently running its 0.5 mtpa smelter plant by importing alumina,” he added.


VAL’s Lanjigarh refinery as well as smelter and captive power plant (CPP) complex at Jharsuguda has seen grounding of investments of Rs 50,000 crore. The company’s smelting facility and CPP engage more than 15,000 people.


VAL had designed its refinery in Odisha keeping in mind the locally available bauxite. The aluminium major had entered into an agreement with state controlled miner Odisha Mining Corporation (OMC) for supply of bauxite.


But attempts to mine bauxite at the ecologically sensitive Niyamgiri hills under OMC’s leasehold in Lanjigarh district were red flagged by the environment ministry that had scrapped the Stage-II forest clearance on August 24, 2010.



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