The Supreme Court Tuesday allowed Anil Agarwal-led Vedanta’s Jharsuguda unit to participate in bids for surplus alumina being sold by National Aluminium Company Ltd (Nalco), a leading producer of low-cost metallurgical grade alumina in the world. It had challenged an order of the Odisha High Court, which had allowed Vedanta to participate in the tender.
It was Nalco’s contention that Vedanta could not participate in the tender as the registration of customers for export sale was open only to overseas customers. Nalco had contended that if Vedanta would like to bid for the surplus alumina, it must do so through its UK unit. Vedanta, on the other hand, had contended that the Central government’s policies said that since any special economic zone (SEZ) was deemed as foreign territory, it should be allowed to participate in the bidding.
In its judgment, the Odisha High Court agreed with Vedanta and said it did not make commercial sense for Vedanta to bid for the alumina, spend money to take it all the way to London, and then bring it back to the SEZ in Jharsuguda. Following the High Court’s decision last March, Nalco had moved the apex court.
With the apex court’s approval to participate in the excess alumina bids, Vedanta is likely to resume operating its Jharsuguda plant at full capacity, which was until now running at low capacity due to lack of raw materials.
Vedanta’s Jharsuguda unit, set up for over Rs 12,000 crore, had initially planned to use alumina from its Lanjigarh refinery. The plan, however, ran afoul after the government denied permission for bauxite mining from Niyamgiri.