Firms urge State to ensure raw material security

| | BHUBANESWAR
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Firms urge State to ensure raw material security

Friday, 13 September 2019 | PNS | BHUBANESWAR

Major investors in the State are restive due to absence of raw material security and they have requested the State Government for making provisions for the industries keeping their investments in sight.

One after another major investors have raised the issue with the State Government and with the presence of proactive industry savvy Chief Secretary Asit Tripathy, the captains of industry are hopeful of a favourable dispensation for the investors.

While Jindal Steel and Power Limited (JSPL) chairman Naveen Jindal raised the issue with Chief Secretary Tripathy, Vedanta Limited, largest investor in the State, which is facing a tough time, has also approached the State administration for raw material security.

In fact, in absence of bauxite availability, Odisha operations of Vedanta Alumina at Lanjigarh will be unmaintainable and economically unviable.

While Vedanta Limited has already invested Rs 52,000 crore, it is expanding its refinery at Lanjigarh with a new investment of Rs 6,500 crore. This will make the refinery plant of 2 million tonnes per annum (MTPA) to a 6-MTPA capacity.

The Odisha Government had approved the expansion project in April 2018. For a 6-MTPA plant, it requires 18 MTPA bauxite and the Vedanta has “zero raw material security”.

The Nalco, which is having a 2.28-MTPA-capacity refinery, has the bauxite requirement of 6.8 MTPA and with mines available, the Central PSU has “raw material security” for 56 years.

HINDALCO, which is having 1.5 MTPA refinery plant, requires 4.5 MTPA of bauxite and it has “raw material security” for 45 years.

So it is high time that the State Government needed to review its mechanism for providing raw material security to the largest investor in the State, said a senior officer in the Department of Industries. A major bauxite deposit is available at Sasubahumali, which is under control of the Odisha Mining Corporation (OMC). Operationalisation of the mineral block would help the investors take mineral for their requirement, officials said.

Expansion of the Kodingamali mines from 3 to 6 MTPA is needed, said a senior official.

Raising the raw material securityduring his meeting with the Chief Secretary, Naveen Jindal pointed out that companies which have invested thousands of crores of rupees in steel plants and have created employment in thousands should be given preference in iron ore auction.

He had also requested for giving iron ore mines first for captive consumption and then for merchant mining. Jindal also demanded for reduction in iron ore price because of fall in global steel price

The JSPL has invested Rs 47,000 crore in Odisha in setting up the largest steel plant in the State. “It needs raw material security to become viable," he added. The JSPL buys about 1 million tonnes of iron ore every month in Odisha, making it the largest buyer of iron ore in the State. So, the JSPL needs raw material security, urged Jindal, hoping for a favourable decision by the Government.

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