Vedanta Aluminium to Double Alumina Output After Mine Approval

Nov. 19 (Bloomberg) -- Vedanta Aluminium Ltd., a unit of India’s largest copper producer, plans to double alumina production once it gains approval to mine bauxite in Orissa. Approval for the mine will come “soon,” Mukesh Kumar, the chief operating officer of the unit of Vedanta Resources Plc, said today in a telephone interview without specifying further. Once approval is given it will take eight months to increase refinery output to 1.4 million metric tons, he said. Vedanta Aluminium is currently producing alumina at a rate of 700,000 tons a year, below the 1 million ton capacity, because of delays in securing mining rights from the federal government. “We will have steady raw material supply and our costs would significantly come down once the mine becomes operational as there will be no additional freight cost,” Kumar said. Vedanta Resources fell 2 percent to 2,404 pence at 10:40 a.m. in London. The company has the support of the local people, Kumar said, saying most of the population supports the project. Moneycontrol Web site reported in January that local tribal people had protested against the project in Niyamgiri hills. Vedanta Aluminium plans to spend as much as 80 billion rupees ($1.7 billion) to raise refining capacity to 6 million metric tons by 2013. Aluminum is made from alumina which is refined from bauxite. “We have applied for the approval of the refinery expansion and would proportionately seek to secure raw material supplies,” Kumar said. Vedanta Aluminum is 70.5 percent owned by Vedanta Resources and 29.5 percent owned by Sterlite Industries (India) Ltd., according to the 2008 Sterlite annual report. To contact the reporter in this story: Abhishek Shanker in Mumbai ashanker1@bloomberg.net.