Vedanta Aluminium to lay off employees, no hope of revival of refinery

BHUBANESWAR: Vedanta Aluminium on Thursday will inform Odisha government its decision to lay off employees at its alumina refinery at Lanjigarh with no hope of an immediate revival of the plant, the company's chief operating officer Mukesh Kumar told ET.
VAL, a unit of London-listed Vedanta Resources, was forced to close down its refinery with a million tonne a year capacity two weeks ago due to non-availability of bauxite, the key raw material used to produce alumina.
The Act requires any plant employing more than 100 workmen to take prior permission from the state government for lay-off, retrenchment and closure. VAL has about 550 employees on its payroll.
In the past three months, about 70-75 employees, including engineers and executives, have already left the refinery, according to Kumar. The Lanjigarh plant had been facing bauxite shortages since its commissioning in August 2007 as the state government could not fulfill its commitment of supplying bauxite from the nearby Niyamgiri hills through state-run Odisha Mining Corporation, which held the lease due to regulatory and legal issues.
The refinery requires 10,000 tonnes of bauxite a day to operate at full capacity and the VAL had been lifting bauxite from the open market, which also has dried down. Odisha has a rich deposit of bauxite, pegged at 1,849 million tones, of all categories.
Ironically, during 2003-09, only 28.8 million tonnes of bauxite ore has been produced mostly from Panchpatmali mines of the maharatna National Aluminium Company. Some 7,000 people, mostly locals, would be seriously affected due to the retrenchment, a company top official said. VAL had announced to shut down the refinery on December 5. The Lanjigarh refinery has already incurred financial.

Courtsey: Economic Times

Can Vedanta restart Lanjigarh refinery?

Eight years ago, Kada Majhi, a tribal woman of Kinari, a village in the Kalahandi district of Odisha, eked out a living with paltry wages as a daily labourer. When Vedanta Aluminium started constructing a one-million-tonne-per-annum aluminium refinery at Lanjigarh, she, along with her husband and five children, shifted to Niyamagiri Vedanta Nagar, a model township, set up by the company to rehabilitate persons displaced by the project. Since then, the economic profile of the family has improved significantly. While Kada, 32, started working as a tailor in the Maa Manikeswari Self Help Group, promoted by Vedanta Aluminium, after required skill training, her husband got a job in the factory that fetched him Rs 15,000 per month. The children study at the DAV Vedanta International School — the first in the Majhi family to ever enter a classroom. The same story of improved fortunes runs across the 121 displaced tribal families settled in Vedanta Nagar, most of whom for the first time have accessed modern amenities like a pucca house, electricity, piped drinking water, healthcare and education — all free of cost.
In fact, the sudden change in lifestyle of these families had in the past led to agitations in the nearby villages — people there demanded similar benefits even at the cost of taking away their land. While most of the displaced persons have been provided permanent jobs by the company, drawing a salary of Rs 10,000 to Rs 15,000 per month, about 500 of the 1,800 project-affected persons (those who lost their land and not home) have been engaged by contractors and earn up to Rs 5,000 per month. No wonder, ever since Vedanta announced that the refinery would be closed due to non-availability of bauxite, they are a worried lot, with a question mark over their future and livelihood. “What will our children do? Where can we find another job if this plant closes down”, asks Kada.
“The dream of several educated youth in Kalahandi district to get the job in their own district will be shattered if the plant is not revived”, says Parimita Behera, an assistant manager in the plant. Incidentally, Vedanta Aluminium is the only large industry in Kalahandi, a tribal district which ranks among the poorest in the country. The anxiety is all pervasive in Lanjigarh, which saw a spurt in economic activity over the last decade, catapulting it from a small village to a small town with the arrival of Vedanta. The factory currently engages about 3,500 people — 550 on the company’s payroll and another 3,000 through the contractors. There are also about 5,000 others who earn their livelihood by working in small shops, garages, filling stations, hotels, transport businesses, etc, in and around the town. But amidst the dismay, a tinge of optimism is displayed by the locals who hope the shutdown of the refinery may be “temporary”. “We expect the plant will reopen soon. The government should take urgent steps to supply bauxite”, says Sridhara Tensia, president of the Lanjigarh Anchalika Bikash Parishad.
The company, in its advance closure notice to the government, had expressed its intention to shut the refinery temporarily from December 5, citing non-availability of bauxite. It had urged the government to arrange alternative sources of bauxite (other than the controversial Niyamgiri deposit) for the revival of the unit. More than two years ago, Vedanta Aluminium had sought bauxite supplies from seven alternative mines, five in Rayagada and two in Kalahandi, after the Union ministry of environment & forests had scrapped the stage-II forest clearance for Niyamgiri lease in August, 2010.

Courtsey: Business Standard