Vedanta hunts for new bauxite reserves here

KOLKATA: With Vedanta Alumina's $800-million alumina project in Orissa locked in legal dispute over the company's mining rights at Niyamgiri Hills, efforts are on to scout for fresh bauxite reserves that could serve as an alternative mining site. Vedanta Alumina is part of Vedanta Resources, a UK-based metals and mining company with interests in copper, zinc and aluminium sector in India. Last week, the Supreme Court ordered a thorough environmental impact assessment study on the proposed mining area. The report has to be submitted by the environment ministry by October 5, when the case is scheduled to come up for hearing. The Niyamgiri Hills is part of a dense forest that is home to the Dongaria Kond tribe. On October 5, the apex court could either give its consent to the mining project or force Vedanta to choose another site, or reject the proposal. In the worst-case scenario, if the court rejects Vedanta's mining right, the Sasbahumali bauxite deposits could be considered an alternative by the state government. "Most of the other reserves are located far away and have already been identified and earmarked for other projects. However, the Sasbahumali area is located 40 -50 km from the company's refinery. Hence, it would necessarily add to the overall project cost. The bauxite mined in this area will have to be transported via conveyor belt or any other suitable system" a top source close to the developments told ET. The need to have an alternative plan is crucial for Vedanta Alumina since its $800 million alumina refinery has already been commissioned on schedule in March 2007. The refinery is not being operated at full capacity and Vedanta has been sourcing bauxite from the market to operate it. The refinery capacity has been planned at 1.4 million tonne (MT), with the company planning to operate 1 MT initially. In any case, the Orissa government is committed to provide Vedanta Alumina bauxite mines with reserves of 150 million tonne. The company's plans in Orissa also include a 0.5 MT smelter at Jharsuguda. Work on the aluminium smelter is nearing completion and first phase will be commissioned in the first quarter of 2008.