Vedanta Unit Keeps Aluminum Smelter Shut as Prices Remain Weak

Feb. 24 (Bloomberg) -- Vedanta Resources Inc., the mining company controlled by billionaire Anil Agarwal, will keep its aluminum smelter in southern India shut as prices remain weak, a company official said. A restart date for Madras Aluminium Co.’s smelter, halted in December, has yet to be set, said the executive who refused to be identified because the information is confidential. Aluminum dropped to a seven-year low today as the global recession cut demand for vehicles and airplanes. Transportation is the biggest use of the lightweight metal, according to Citigroup Inc. Madras Aluminium spent about $2,080 to produce a ton of aluminum before the smelter shut, according to the official. Aluminum for three-month delivery fell as much as $5, or 0.4 percent, to $1,283 a ton as of 8:30 a.m. in London. Vedanta, with capacity to make 410,000 tons of aluminum, produced 396,000 tons in the year ended March 2008, the company said in its latest annual report. Madras Aluminium can produce 40,000 tons a year. Madras Aluminium’s refinery for alumina, a raw material used to make aluminum, will maintain production and its power plant will sell surplus electricity, the official said. To contact the reporter on this story: Debarati Roy in Mumbai at droy5@bloomberg.net