New Delhi: Vedanta Resources Plc said yesterday it would not mine bauxite at a controversial project in eastern India until it can win over local communities opposed to its plan.
India’s Environment Ministry had already rejected Vedanta’s request to mine in the Niyamgiri hills of Odisha state following persistent protests from local communities that consider the region sacred..
While Vedanta stopped short of saying it had abandoned the project, its decision to await the consent of local communities will require it to look elsewhere for the raw material to feed its alumina refinery in the same state.
Analysts said Vedanta’s announcement is an early hint of plans by Tom Albanese, the former Rio Tinto head who became Vedanta’s chief executive last month, to make the London-listed company a more attractive sell to international investors.
Vedanta, a company with a market capitalisation of $4.2bn and base metal mines in several countries, relies on aluminium production — exclusively in India — for about 12 percent of its revenue.
Alumina, produced from bauxite, is used in turn to produce aluminium.
But Vedanta’s one million-tonne-per-year Lanjigarh alumina refinery in Odisha has struggled to source bauxite ever since it was commissioned in August 2007. The company has incurred high costs bringing in the raw material from elsewhere.
The refinery operated at only 91 percent of its capacity in the quarter ended March 31, producing 227,000 tonnes of alumina.
Reuters
