Vedanta’s decision to source bauxite locally has helped cut alumina cost of production (COP) down by 8pc to $269/mt in the December quarter. Alumina production at Lanjigarh rose to 476,000mt, up by 16pc from the prior year period. In the nine months (Apr-Dec) period ended December, the production at Lanjigarh refinery was 1.33mn mt up by 24pc from the prior year period. The COP of alumina fell to $281/mt, down by 16pc in Apr-Dec 2018 period.
In December quarter, aluminium COP dropped by 9pc to $1,691/mt, from the prior year. In the nine months, Aluminium COP was at $1,769/mt, down 12pc, from the prior year.
On the bauxite sourcing front, Vedanta is putting efforts to significantly increase mine output and explore new resources under India’s New Mineral Policy. Under its alumina ramp-up plan, Vedanta will expand its alumina capacity to 2.7mn mt annually under phase-I expansion and medium-term expansion to 4mn mt annually. The expansion will ease alumina prices below $300/mt, according to Vedanta.
Vedanta plans to ensure coal security for 90pc of its requirement, which is currently at 72pc. The company announced that it will achieve the same through e-auctions and evaluate other options. Also, Vedanta will shift to transporting coal and other raw material through rail rather than road transportation.