Vedanta gets second bauxite mine in Orissa

Bhubaneswar: The Orissa government seems to have in-principle agreed to lease out Sashubahumali-Pasangamali bauxite mines to London-based Vedanta Resources. In a recent high-level meeting here between chief minister Naveen Patnaik and Vedanta Resources chairman Anil, the state government has promised the mines to the company. Government sources told FE that the mines have been promised in view of Vedanta’s proposal to ramp up its Lanjigarh refinery capacity to 5 million tonne from the present 1m tonne. Vedanta group has been given the Niyamgiri bauxite mines through a special purpose vehicle (SPV) of Orissa Mining Corp (OMC) and the Vedanta group company Sterlite Industries (India) Ltd. Since the Niyamgiri mines promise a reserve of 70 to 80 m tonne, Vedanta has been insisting for allotment of another bauxite mine to meet the raw material demand of the expansion project. The state government, in fact, earmarked the Sashubahumali–Pasangamali mines in Kashipur block of Rayagada district in favour of Balco at a time when Sterlite was suiting for it. The state government had given a promissory note in this regard to the Centre, relenting to the pressure from NDA government, which was insisting on committing the mines to enrich the valuation of Balco in the post-bid period. Following a controversy over the deal, the state government linked the mines with Sterlite, setting up a refinery in the state. The government later withdrew its consent for leasing out the mines to Sterlite as the later failed to comply with the conditions within the stipulated time. The state government, however, was finding it difficult to lease out the mines as National Aluminium Company Ltd (Nalco) was the first applicant for the mines. To free the mines, the state government set a condition that it would recommend the Potangi mines in favour of Nalco if the later forgo its claim on Sashubahumali-Pasangamali mines in favour of the OMC. The chief minister, recently, also discussed about the Nalco’s claim over Sashubahumali mines with the mines secretary Shantanu Consul. ---financialexpress