Vedanta Aluminium mulls layoffs amid bauxite paucity

Vedanta Aluminium Ltd, India's largest aluminium maker, is considering layoffs within two months at its alumina refinery in Odisha as a shortage of bauxite, a vital mineral, shows no signs of easing, VAL president Mukesh Kumar said today.

VAL, a unit of London-listed but India-focused Vedanta Resources, has about 550 employees. It closed down the 1-million-tonne per year refinery two weeks ago due to a shortage of bauxite, and hopes of its revival are fading.

The world's fifth-biggest bauxite producer, VAL has been limiting the issue of bauxite leases mainly because of local protests over land acquisition.

"We don't know how long this crisis will continue. We don't have any other choice left but to retrench staff," Mukesh Kumar told sections of the media.
 
"It could be 10 or 100 (the number of layoffs) by January-February depending on the situation," Kumar said.

About 75 employees, including engineers and executives, have already left the refinery, at Lanjigarh in Kalahandi district, about 450 km from Bhubaneswar, in the past three months.

The Lanjigarh plant has faced bauxite shortages since its commissioning in August 2007, after an arrangement with a state agency to source bauxite from the nearby Niyamgiri hills ran afoul of the union ministry of environment and forests and got mired in litigation.
 
The refinery requires 10,000 tonnes of bauxite a day to operate at full capacity.

Vedanta says the plant is designed for local bauxite and only this can ensure its sustainability.