Vedanta Aluminium to invest $300 million in current fiscal; Lanjigarh alumina refinery expansion remains the primary focus

The Chief Executive Officer of Vedanta Aluminium, Ajay Kapur stated: “Vedanta Aluminium has set a capital expenditure target of $300 million for the current fiscal.”

Kapur added: “Our most significant expansion will be at our Lanjigarh alumina refinery, subject to government approvals, the majority of our projects should be completed over the next 2-3 years.”

India’s largest aluminium producer, Vedanta delivered 1.96 million tonnes in 2020-21, while the organisation targets to boost its annual aluminium production capacity to 3 million tonnes, as commented by Ajay Kapur.

The production of aluminium demands double the amount of alumina as its raw materials. On the ground to increase the production of aluminium, Vedanta is raising the annual capacity of the Lanjigarh refinery to 5 million tonnes from 2 million tonnes.

Kapur also said: “Additionally, Vedanta also imported around 2 million tonnes of alumina in the just-concluded financial year.”

Vedanta’s Lanjigarh alumina refinery and the flagship Jharsuguda aluminium smelter are located in Odisha, India.

“In 2020, Vedanta won a case in the Supreme Court against alumina producer National Aluminium Company Ltd (NALCO) to be able to buy the alumina that NALCO exports. Though both NALCO and Vedanta have their production units in Odisha, the order requires NALCO to supply alumina to Vedanta at the Visakhapatnam port. Given the logistical hurdles, imports have remained a preferred way to meet the shortfall in Vedanta’s in-house production of alumina”, Kapur added.

The Lanjigarh alumina refinery expansion is aimed at covering this gap. However, the refinery has also countered difficulty in sourcing bauxite.

“The production of Alumina requires thrice the amount of bauxite, while half of India's vast bauxite reserves are based in Odisha, no bauxite mines have been successfully auctioned across India over the past six years. Vedanta met half of its bauxite demand through domestic procurement from public-sector miners and the other half from imports during last fiscal”, Kapur said.

He further added: “We have urged the State government to expeditiously bring bauxite mines into the auction.”

Jointly with the Odisha government, Vedanta also plans to set up an industrial park at Jharsuguda jointly. “Our smelter and power plant can supply hot metal and electricity to MSME units at the aluminium park, who can be given a favourable policy environment,” he said, adding that the business plans to spend INR100 crore on this project.