The Orissa government has granted Sesa Sterlite a prospecting licence for two laterite deposits, which would give the Anil Agarwal-owned company some respite on the raw material front for its 1 million tonne per annum alumina refinery in Lanjigarh.
Sesa Sterlite is currently facing losses on account of the high import and transportation costs of bauxite ore from outside Orissa to feed the plant.
With the state steel and mines department granting two prospecting licences (PL) for laterite deposits over the 47-hectare land in Dangdeula village of Koraput tehsil last week, the second one in less than a month, company officials hoped that extraction of bauxite from laterite would help lower production cost of alumina.
State director of mining Deepak Mohanty said laterites and lateritic soils contain 20 to 25 per cent aluminium oxide.
“If blended with good quality of bauxite, it can be used to produce alumina,” he said. As laterite is a minor mineral, its extraction does not require approval from the Union mines ministry.
“After the Union ministry of environment and forests rejected our application for mining bauxite from Niyamgiri hilltop last year, we are running our plant by importing bauxite from Gujarat, Maharashtra, Madhya Pradesh and Jharkhand. We are also importing from New Guinea,” said Anil Bhat, a senior official of the company.
“We are expecting grant of PL for the third laterite deposit in the same village within a next month. Once the monsoon gets over, we would soon start prospecting and depending on the results we would take a call,” he said.
The Niyamgiri hilltop, which Sesa want to mine, contained an estimated 72 million tonnes of bauxite. But the company could not mine due to opposition from Dongaria Kondh tribals residing on the hill slopes.
Sesa Sterlite officials said despite the acute bauxite crunch, the Lanjigarh plant is running at 80-90 per cent of its capacity over the last two months.
“We don’t want our machinery to rust. We are hoping that the laterite deposits would help us tide over the crisis till we get a bauxite supply from Orissa,” said the official.
To run its 0.5 mtpa aluminium facility in Jharsuguda, Sesa Sterlite needs at least 3 million tones of bauxite for the alumina refinery plant at Lanjigarh every year. State mining department officials said the company has filed 33 applications for bauxite mines in the state including Karlapat (south), Sasbahumali and Gandhamardhan.
Sesa Sterlite has already entered into a tripartite agreement with Larsen & Toubro and its partner Dubai Aluminium Company to buy Raykal Aluminium, their joint aluminium venture. The firm hoped that it would be able to source bauxite from the captive mines allotted to L&T in Sijimali and Kuturumali of Rayagada and Kalahandi districts. But the company is yet to graduate to mining lease from the prospective lease stage. The two mines are estimated to have 300 million tonnes of bauxite.