Vedanta to close down alumina refinery unit in Odisha

Vedanta to close down alumina refinery unit in Odisha

Mining conglomerate Vedanta today said it will initiate steps for gradual closure of its alumina refinery at Lanjigarh in Odisha mainly due to shortage of raw material and absence of bauxite linkage within state.

"In the absence of bauxite supply from Odisha, the current market dynamic has threatened our very survival. With a heavy heart, we are bound to take some steps which are going to be painful," Abhijit Pati, CEO – Aluminium, Vedanta Limited, said in a statement.

The company is "forced" to initiate the process of gradual closure of the facility, the statement said. Vedanta is taking steps to formally communicate to the concerned state government departments about the development, it said.

"With the current market turmoil, which is unlikely to improve soon and in the absence of access to bauxite from within the state, the Lanjgarh refinery is facing a daily loss of Rs 3 crore. Hence, we are forced to initiate the process of gradual closure," plant's chief operating officer K K Dave said.

Vedanta ran the plant with commitment for nearly a decade despite heavy odds, he said and added its closure would impact nearly 10,000 people directly and the region at large.

Dave addressed a gathering of employees and representatives of local communities and explained to them how absence of bauxite linkage from Odisha had led to economic unviability of Lanjigarh operations.

He said the CSR initiatives of the company like mid-day meal in 187 schools and Vedanta Lanjigarh Hospital which provides free medical treatment would be affected, the statement said.

The closure of Lanjigarh refinery would also impact the company’s Jharsuguda operations, he said.

Recently, Pati had told PTI that the domestic industry would be forced to take "drastic steps" like job cuts and production cap due to cheap imports and falling prices of aluminium in the global market.

"We are at such a low point that if the government does not support the aluminium industry, we may have to resort to drastic steps such as job cuts and bringing down production," Pati had said.

Vedanta Aluminium, which is one of India's largest aluminium producers, operates a refinery having a capacity of 1 million tonnes per annum (MTPA) at Lanjigarh in Odisha.

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