Vedanta to shut down its Odisha refinery plant from December 5

Published: 06th September 2012 10:06 PM  |   Last Updated: 16th October 2012 11:56 AM   |  A+A-

By PTI

Unable to run the refinery project to its full capacity since inception due to scarcity of bauxite, Vedanta Aluminium Limited today formally informed the Odisha government about its plan to shut down the plant from December five.

"We have given a letter to the secretary-cum- commissioner of labour department of the Odisha government about the closure plan. The three month notice is mandatory under the industrial dispute act before shutting down operations," Mukesh Kumar, Chief Operating Officer of VAL told PTI over phone.

Stating that the VAL had designed the smelter plant at Lanjigarh in Kahalandi district based on buffer bauxite, Kumar said the company could not get a gram of raw material from the state.

"Though you (state government) had guaranteed supply of bauxite raw material in the MoU, the company has not received any during its five years operation," Kumar wrote in the letter seeking the state government's help to run the plant.

The company, which made operational its 1mtpa refinery at Lanjigarh in 2007, also stated that it could not use the plant to its full capacity during the last five years.

"Though we arranged raw material from other states, it was not possible anymore due to environmental clearance in many places. VAL also could not arrange bauxite from Gujarat as the state government preferred to export the raw material," Kumar said.

Under such a situation, the company incurred a loss of about Rs 2,500 crore for running the refinery at Lanjigarh, he said in the letter.

The VAL COO also requested the state government to help it by providing the raw material for running the refinery plant after December 5.

"If situation improves within 90 days, the company may not shut down the plant," he said.

The company has so far invested Rs 9,000 crore in the project which provided employment to 7,000 people including direct jobs to 3,000 persons, the COO said.

Though the company applied for 26 bauxite reserves in the state, nothing was finalised due to different reasons.

The company required 10,000 ton of bauxite every day to feed its 1mtpa refinery plant.

Steel and mines minister R K Singh said "We have not received the letter. The government will examine VAL's issue after getting the letter."

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