Monday, September 13, 2010

Vedanta set to source bauxite from Gujarat

S Kalyana Ramanathan / London September 13, 2010

Even as London-based mining and metals major Vedanta Resources struggles to procure bauxite from Niyamgiri in Orissa for its 1-million tonne capacity alumina project in the state, it has managed to find a new source of a slightly lower grade of bauxite in Gujarat.

According to a senior Vedanta executive, the supply of bauxite from Gujarat should start this week. The Orissa alumina project needs about 3 million tonnes of bauxite to run at full capacity. An estimated 55 per cent of this already comes from Balco in Chhattisgarh and another 25 per cent from Jharkhand, Madhya Pradesh and Andhra Pradesh. The remaining 20 per cent is expected to be met from Gujarat and in part from Maharashtra, said Mukesh Kumar, chief operating officer for Vedanta Aluminium Ltd in Lanjigarh, Orissa.

The additional source of bauxite will cost Vedanta nearly four times that of procuring it from Orissa. The cost of bauxite from Orissa would have been Rs 600 a tonne, while the new source will cost company around Rs 2,400 a tonne. The difference is mainly due to the cost of transportation by sea from the west coast to the east coast and rail freight charges for the last mile by land.

The cost of production, therefore, will escalate, but the company expects this to be only a temporary challenge and hopes to find a new source of bauxite within Orissa.

The company has an agreement with state-owned Orissa Mining Corporation to feed its plant with bauxite ore. “The state is committed to this deal and we hope to resolve it soon,” said Kumar.


Vedanta’s investment proposal in Orissa (Figures in Rs crore)

Power project

(2,400 Mw)


Alumina project

(up to 5 mtpa)


Aluminium smelter


(up to 1.75 mtpa)


Vedanta University

in Puri




(Note: According to Vedanta Resources, successful implementation of its industrial projects would fetch Orissa state additional tax revenue of Rs 2,500 crore annually)

The bauxite from Gujarat is also of lower quality than what it would have been in Orissa. The alumina content in the bauxite in Gujarat is around 42 per cent, while the Niyamgiri ore has 44-47 per cent alumina content. Further, the silica content in the Gujarat ore is 3.5-4.2 per cent, or nearly four times that of the Niyamgiri ore. Every 0.1 per cent of additional silica in the ore means an additional 3-3.5 kg of caustic soda used in processing the bauxite, thus escalating the cost of refining.

It may recalled that the Narendra Modi-led BJP state government had come to the rescue of Tata Motors when the company was unable to build its Nano small car project in Singur in West Bengal. The project was relocated o Sanand in Gujarat in October 2008.

Until recently, the Gujarat government had a stated policy of not allowing bauxite to be shipped outside the state or overseas. This policy was changed two months ago to allow movement of ore within the country. Gujarat Mining Development Corporation floated three tenders in four months, but could not find buyers due to the lower quality of the state’s bauxite.

Vedanta hopes to overcome this problem by mixing the Gujarat bauxite with better quality ores from other sources within the country. “We will blend it with bauxite from Chhattisgarh and Jharkand,” said Kumar.

Like Posco’s steel project India, Vedanta is also a victim of the political tussle between the BJD government in Orissa and the Congress-led coalition at the Centre. The Orissa Mining Corporation, which has sought the Centre’s clearance to extract bauxite in the state, is a state government-owned company, with Vedanta only a buyer of the ore.

Orissa has the largest source of bauxite in the country, with reserves in excess of 2,000 million tonnes. Nearly a third of these deposits are within a 40-km radius of Vedanta’s refinery. In the last 25 years, only 90 million tonnes of ore has been extracted in the state by central government-owned Nalco.

Saturday, September 4, 2010

Pak envoy sees Pawar's hand in ICC suspension

S Kalyana Ramanathan / London September 4, 2010

Pakistan’s High Commissioner to the UK, Wajid Hasan, today criticised International Cricket Council (ICC) Chief Executive Haroon Lorgat and President Sharad Pawar, saying he sensed a “conspiracy” behind the suspension of three Pakistani cricket players facing allegations of spot-fixing.

He told the BBC that ICC intervention at such an early stage of investigation was uncalled for. Hasan said when the result of an investigation by Scotland Yard was pending, ICC had no authority to intervene at this juncture. He said even the Pakistan Cricket Board (PCB) could not take action or intervene when there is an ongoing inquiry.

Later in the day, addressing a press conference in London, Lorgat dismissed a question that the action had been taken to keep Pakistan out of international cricket.

Late last night, ICC had issued a statement saying that it has charged Pakistani players Salman Butt, Mohammad Asif and Mohammad Amir with offences under its anti-corruption code, relating to allegations of spot-fixing during the fourth test between England and Pakistan at Lord’s last month.

In an interview published today, Hasan also said that the Pakistani cricketers under investigation were pawns in a game of vendetta meted out by Indian bookies in Mumbai, who had a score to settle with Mazhar Majeed, the bookie in London first arrested and later released on bail by the British police.

In an interview to The Daily Telegraph, Hasan claimed, “(Mazhar Majeed) was a bookie involved with Indian bookies in Mumbai. I think it is the Indian bookies that have used the sting operations to settle scores with this Majeed chap... probably because he has not kept his contract with them.”

The spot-fixing scandal first broke early last month after a sting operation conducted by media baron Rupert Murdoch’s tabloid News of the World.

ICC Chief Executive Haroon Lorgat played down the conflict with the PCB, saying that Hasan had a right to his opinion and that ICC would question the players only after it gets a green signal from Scotland Yard. As the charges relate to the commission of a crime, Scotland Yard questions the players involved first.

Lorgat today said, “We will not tolerate corruption in cricket — simple as that. We must be decisive with such matters, and if proven, these offences carry serious penalties up to a life ban. The ICC will do everything possible to keep such conduct out of the game, and we will stop at nothing to protect the sport's integrity. While we believe the problem is not widespread, we must always be vigilant.

“It is important, however, that we do not pre-judge the guilt of these three players. That is for the independent tribunal alone to decide," Lorgat added.