Despite being offered 'top dollar' for alumina it doesn't need, Vedanta rival Nalco is still hesitating over the former's offer, which obviously isn't as tempting as the ailing India aluminium producer first thought.
Last month, as promised, Vedanta closed its alumina refinery at Lanjigarh due to a lack of bauxite. Now it seems that Nalco has an exportable alumina surplus of nearly 1Mt and stands to gain Rs 250 crore from striking a deal with Vedanta.
Unfortunately for Vedanta, however, the fact that Nalco is an arch rival means that Nalco would rather export it's spare alumina than sell it to Vedanta.
Vedanta is baffled by Nalco's reticence, claiming that the deal would save Nalco up to $22 per tonne on alumina transportation costs at a time when Nalco's Q3 net profits were down 96.4% when compared with the same period the previous year.
Vedanta has even offered Nalco a 7% to 10% premium on its export alumina price but has not managed to strike a deal.
Vedanta has been beset with problems ever since a deal struck with the Odisha Mining Corporation for the supply of bauxite from the Niyamgiri hills hit problems. The ecologically sensitive nature of the area led to a Government ban and while the company then sought to buy bauxite from other Indian states it was hit with logistical, regulatory and procedural problems, according to a report in India's Business Standard.
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