Bauxite buys from open market adding to costs -Vedanta Aluminum

 

 

To make matters worse, rising energy costs and a slowing demand have also led the unlisted VAL to post USD 25 million loss in the September quarter.

 

 

Mr SK Roongta MD of Vedanta Aluminum who has come in from SAIL after spending close to four decades with the steelmaker said that the company is now close to getting alternate supplies of bauxite and will apply afresh for the refinery expansion to grow the aluminum business.

 

 

Q - Vedanta Aluminum's fiscal Q2 performance has been dismal given the huge focus and the large plans the group has for the metal? What is your opinion?

 

 

A - Despite a 7% increase in production during the first half of the fiscal year, our overall cost of production was adversely affected by unfortunate pot outage at our Jharsugda unit in June and also due to higher input costs. However we have restored many pots back in operation and are steadily improving our efficiency parameters.

 

 

Q - What is the status of Vedanta's aluminum's business now as globally the industry is hit by rising costs and erosion in demand?

 

 

A - We set up the alumina refinery at Lanjigarh based on the assurance and an MoU that bauxite would be made available to us by Odisha Mining Corporation. Unfortunately we are still awaiting resolution of environment and legal issues. As a result we have to buy bauxite from the open market from places as far as Gujarat and Madhya Pradesh which has resulted in significant logistics costs.

 

 

Vedanta Aluminum is fully committed to meet its obligations in respect of environment protection, community development and tribal rights. We need steady supply of domestic coal. Presently the actual linkage coal is much lower than that assured by the government. So, we are not able to run our power plants at optimum level. We are next to abundant coal reserves in the Mahanadi coal basin and hope the government will take a comprehensive look at the coal scenario and will find solutions.

 

 

Q - Vedanta said it will cut costs by USD 400 per tonne and also trim expenses at Balco. How will this be done?

 

 

A - There are two new major projects on anvil at Balco. The first of 4X300 mw power units would go on stream in Q3 FY 2012 and the other unit will be progressively commissioned thereafter. The new 325,000 tonne smelter would start production in the first half of the year 2012. We are hopeful of starting captive coal mining at Balco in FY2013. At VAL we are concentrating on improving our operational efficiencies, in line with global standards. There are plans to bring down energy costs and optimise logistics costs by commissioning new infrastructure projects.