Vedanta considers layoffs in Odisha

Anil Agarwal-led Vedanta Resources' subsidiary VAL on Wednesday said it is considering up to 100 job cuts in the next two months at its recently shut Lanjigarh facility in Odisha as hopes of an immediate revival of the plant fade, the president of the company said.

"We have not analysed the numbers right now," VAL President Mukesh Kumar said, but added that it could be anything ranging from "ten to 100". VAL, a unit of London-listed Vedanta Resources, has about 550 employees. It closed down the 1-million-tonne per year refinery exactly two weeks ago due to a shortage of bauxite, the key raw material used to produce alumina.

India, the world's fifth biggest bauxite producer, has been limiting the issue of bauxite leases mainly because of local protests over land acquisition.
"We don't know how long this crisis will continue. We don't have any other choice left but to retrench staff," Kumar said. "It could be 10 or 100 by January-February depending on the situation," Kumar said.

A Vedanta official, who did not wish to be identified, said the closure of the unit would impact the livelihood of about 7,000 locals.

About 75 employees, including engineers and executives, have already left the refinery, at Lanjigarh in Kalahandi district, about 450 km from state capital Bhubaneswar, in the past three months, while many more are scouting for opportunities.

VAL had shut down its one million tonne alumina refinery at Langigarh in Odisha's Kalahandi district on December 5 after being unable to secure bauxite despite concerted efforts. The plant which was commissioned in 2007 has faced raw material shortages ever since inception due to regulatory hurdles like forest and environment clearances and protests by locals. It requires 10,000 tonnes of bauxite a day to operate at full capacity.

The refinery requires 10,000 tonnes of bauxite a day to operate at full capacity.
Vedanta says the plant is designed for local bauxite and only this can ensure its sustainability.

Earlier, Kumar while announcing shutting down of operations in Lanjigarh, had said, “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. For the last few days, we ran the unit at around 20 per cent of capacity incurring heavy loss."

The mining conglomerate, which runs the refinery of 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. Though the company's top management met Odisha Chief Minister Naveen Patnaik and the state chief secretary several times for bauxite for the refinery, no solution could be found.

The company is also considering closure of its 75 MW captive power plant set up in Lanjigarh in view of the uncertain scenario. It 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.