Economic Times reported that anticipating trouble from its workers union, the management of the state owned Aluminium producerNalcois deliberating whether it should supply a trial amount of alumina to Vedanta Resources' refinery in Lanjigarh, Odisha.
Nalco had obtained an advance from its private sector rival for the trial supply of alumina, an intermediate in aluminium making about four months ago. Meanwhile, Vedanta restarted operations at its refinery which has been idle since December 5th 2012. For now, even as it waits for the state to arrange alternate bauxite supply, it has made alternate arrangements by sourcing ore from the captive mine of BALCO its associate and other merchant miners.
Nalco mines 6mt of bauxite annually from its captive mines and owns a 2.2 MT refinery in neighboring Koraput district. Half of the 2 MT alumina is consumed at its smelter in Angul, the rest is mostly exported to global commodity giants such as Glencore. But it won't sell to a Vedanta, which needs alumina for its Jharsuguda smelter, to avoid industry relations or IR problems that invariably flare up every time discussions take place with any of Anil Agarwal's group companies.
Director onNalco's board said that "The company does not qualify for our export tender. Let Vedanta's London registered arm pay in dollars, and it can take the shipload from Vizag port onto the high seas for 12 hours and bring it back inland if it must."
A Vedanta official said that they enjoy SEZ status which should count. We are also willing to pay USD 40 aboveNalco's export or FOB price per tonne of alumina. So great is the fear thatNalcowill be privatized like BALCO (whose majority stake was sold to Vedanta in 2001) that even a visit from a Vedanta official brings work to a standstill. Stiff resistance against the move to privatize the Mines Ministry PSU, seen as an Oriya enterprise, led the NDA government to change its mind in 2003.
Mr Anshuman Das CMD of Nalco said that "I decline to comment on a pure commercial decision between two parties. However according to a July 3 internal note, a copy of which is with ET,Nalcoafter initially dithering seemed to have agreed to send off a few trial truckloads. It eventually shared domestic quotes reserved for the 0.05 million tonnes it sells within the country. Between February to April, Vedanta paid an advance of INR 1.476 million for the 53 tonnes.
Three months laterNalcomanagement sought an endorsement from its committee of directors. Considering the sensitivity of the matter and the apprehension of the IR problems at plant, the marketing department has not raised dispatch instruction till date against the present advance payment made by VAL.
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