SALEM: Madras Aluminium Company (MALCO) Ltd in Mettur stopped the production of aluminium soon after it stopped bauxite mining at Kolli Hills.
The only integrated aluminum company, MALCO is a subsidiary of the UK-based Vedanta Resources.
Confronted with evidence that its bauxite mines did not have permission under various environmental laws of the country for nearly a decade, MALCO on November 21 gave an undertaking to the Madras High Court that it will stop bauxite mining in Kolli Hills with immediate effect.
Soon after they stopped mining in Kolli Hills, they suspended production of aluminium, triggering a panic among the workers.
The company has a workforce of about 250 permanent employees, around 500 contractual labourers and 300 official staff including administrative and managerial staff.
The CITU workers union had thwarted a proposed move, in the wake of the bauxite crisis, to dismantle some major machinery from the Mettur plant and move them to Vedanta group’s north Indian aluminum units by obtaining a stay from the High Court.
However, three days ago the company convinced the court that internal transfer of resources was its prerogative and said that there were no plans to close the Mettur operations completely.
According to company sources, even though production of aluminum has been halted, production of alumina (a stage in metal production prior to the final aluminum metal) was still going on.
This will go on till the stocks of bauxite ore exhausts.
According to Namakkal District Department of Mines sources, the company has petitioned to the government to allow it to bring down 20,000 tonnes of bauxite, which it has already mined at Kolli hills. This is roughly four months raw material requirement.
While efforts would be made to obtain official clearance for bauxite mining in the region, the company can pay its salary bills from third party sale of electricity from its 75 MW captive power plant.
Union sources opined that apart from stopping of bauxite mining being the reason for halting aluminium production, MALCO’s sales margins have declined due to overall global meltdown.
While the production cost at the Mettur plant was much higher than the global metal prices. However, BALCO was able to make a comfortable margin despite the slow down. Huge overheads were eating away MALCO’s margins, sources said.
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