Mumbai: The Orissa government has rejected a proposal by Australian mining giant BHP Billiton to set up a 3-million tonne alumina refinery special economic zone (SEZ) in Gopalpur with an investment of $3.3 billion (Rs14,000 crore).

BHP Billiton''s India chairman M S Ramachandran had made a presentation on the proposed project before Orissa chief secretary Ajit Kumar Tripathy last week.

The chief secretary has conveyed the government''s feelings to BHP Billiton''s India head at a meeting attended by state steel & mines secretary UP Singh, industries secretary Ashok Dalwai, and IPICOL managing director Ashok Meena.

The government refused to accept the offer on the ground that the project did not have any proposal for an aluminium smelter. The state government, which is insisting on value addition to at least 50 per cent of the alumina in the state as part of its mineral policy, has asked the company to submit a fresh proposal with facilities for production of aluminium.

BHP Billiton has sought bauxite mines with proven reserve of 300 million tonne and 5500 acre in Gopalpur for the project.

The company has proposed to establish only an alumina refinery which does not ensure full value addition to bauxite, said a senior official who attended the presentation session. He said maximum value addition would ensure more employment generation as well as extra revenue generation for the state.

According to Industries secretary Ashok Dalwai, the government wanted value addition to the raw material down to aluminium metal and also secondary processing in downstream industries like transport, construction and packaging.

As such the government''s policy says that the investor which agrees for value addition to the raw material only would be provided with captive mines. We could not have two policies, said an official.