Vedanta delays aluminium growth, zinc output jumps

Vedanta delays aluminium growth, zinc output jumps

London: India-focused mining group Vedanta, which posted mixed second quarter output data, has postponed the expansion of aluminium operations after the Indian government rejected a plan to mine the raw material to make the metal.

In August, India denied London-listed Vedanta a permit to mine bauxite in Orissa over environmental concerns.

“Since final clearance was not granted for bauxite mining at Niyamgiri, we have reviewed our capital expenditure programme," Vedanta said in its quarterly production report, giving no financial figures.

The launch of the second phase at the Jharsuguda smelter and a new Korba smelter were being temporarily deferred as well as work on an expansion of its bauxite refinery.

In September, the environment ministry said it had found serious violations at Vedanta’s refinery that uses bauxite to make alumina, a intermediate product. Vedanta had planned to expand the refinery output to 6 million tonnes.

The company’s production report showed aluminium output in the three months to the end of September, its fiscal second quarter, grew 35% to 162,000 tonne as the Jharsuguda smelter continued to ramp up.

Vedanta had wanted to expand Jharsuguda to produce 1.25 million tonne a year and for Korba to make 325,000 tonnes a year. Alumina production at Lanjigarh fell 10% to 171,000 tonne. Vedanta posted mixed output data in its two most imporant product, iron ore and zinc. Refined zinc production jumped 25% to 176,000 tonnes, mainly due to the launch of a new smelter at Rajpura Dariba.

Output of saleable iron ore slipped 3% to 3.2 million tonnes. Iron ore is the group’s most profitable product, accounting for 43% of core earnings in the first quarter while zinc made up 28% of profit. Copper cathode output in India fell 25% to 68,000 tonnes due to a planned 22-day shutdown for bi-annual maintenance at its Tuticorin smelter while copper production in Zambia jumped 65.7% to 58,000 tonnes mainly due to increased custom smelting.

The Supreme Court gave Vedanta the go-ahead to reopen Tutincorin, the world’s ninth largest copper smelter, on 1 October after a lower court ordered it closed due to environmental concerns.