Odisha Government amends Policy to provide bauxite to Vedanta

​Bhubaneswar: The Odisha Cabinet has amended a long-term linkage policy to facilitate Vedanta company to source bauxite from the Odisha Mining Corporation (OMC) to run a refinery and smelter plants in the state.

“The Cabinet decision will enable Vedanta Limited, which has set up an alumina refinery and aluminium smelter in the state under MoUs with the state government, to purchase bauxite from the OMC on a long-term basis at market price discovered through auction in a transparent manner,” Chief Secretary A P Padhi said on Wednesday.

Vedanta Aluminium Ltd has one million tonne refinery at Lanjigarh in Kalahandi and a smelter plant in Jharsuguda. However, both plants are facing raw material shortage, forcing the company to import bauxite from other sources.

The state government had, in September 2014, notified a policy for long-term linkage of iron and chrome ores and other minerals to eligible state-based end-user industries through the OMC.

As per the amendment made by the Cabinet, 70 per cent of the saleable stock of bauxite will be made available for long-term linkage and the balance 30 per cent sold through national e-auction.

The weighted average price derived from the national e-auction will be the long-term linkage price. The floor price for the national e-auction will be kept at production cost plus profit margin of 50 per cent, said Padhi.

As a general principle, in the national e-auction, the OMC will directly deal with the end-user industries. Participation by traders shall be considered only if there is persistent lack of adequate response from the end-user industries, said a statement.

The Cabinet has noted that though Odisha has bauxite reserves of 1,968.862 million tonnes, the annual production was only about 9.2 million tonnes.

In order to operationalise more blocks to create employment opportunities and facilitate investment in mineral-based industries, the Cabinet decided that more bauxite blocks will be explored through outsourcing by the Steel and Mines Department.

The OMC will expedite the statutory clearances for the blocks assigned to it. Wherever the progress is not satisfactory, these blocks may be surrendered and auctioned for prospecting licences (PL) and mining lease (ML) by the state government.

Part area of Karlapat block (excluding the ML area granted to OMC) will be de-reserved and auctioned for PL-cum-ML for expeditious exploitation of bauxite and revenues to the state government, the statement said.