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Vedanta to cut aluminium making cost

Tuesday, Dec 20, 2016

Buoyed by lower alumina and coal costs, diversified metals and mining conglomerate Vedanta plans to keep its aluminium manufacturing cost below $1,400 a tonne.

In its projection for the September quarter, Vedanta said its aluminium-making cost stood at $1,473 a tonne in the April-September period, while its production cost declined to $1,462 a tonne. The fall in aluminium-making cost was on the back of lowering alumina and coal costs.

Vedanta would also be aided by using power from its own sources. It has permission from the state power regulator – Odisha Electricity Regulatory Commission – to draw up 1,800 Mw power from its 2,400 Mw power station at Bhurkamunda, close to its aluminium-smelting facility, without paying cross subsidy charges.

Vedanta is going for a disciplined ramp-up of its aluminium smelters at Jharsuguda and the Balco (Bharat Aluminium Company) unit at Korba (Chhattisgarh) as it eyes a production figure of 1.1 million tonnes (mt) this year. Its production in the first half of FY17 was 0.54 mt.

Ramp-up plan in this period was impacted by power outages at its second smelter at Jharsuguda and Korba. Of the 168 pots affected at Jharsuguda, 26 have been restarted and the rest are being repaired. At the Balco unit, 167 pots have been impacted and they are scheduled to be put in order in the January-March quarter.

Abhijit Pati, chief executive officer (aluminium business), Vedanta, was not available for comments.

To back its aluminium expansion plan, Vedanta is also going for ramp-up its alumina refining capacity at Lanjigarh. The company has resumed the refinery's second stream operations this year with a production target of 1.4 mt. It has pegged the alumina-making cost at $250 a tonne.

Vedanta is working towards viability of its alumina refinery. It has pleaded to the Odisha government to make arrangements for alternative bauxite supplies from any of the mines owned by the Odisha Mining Corporation.

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