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Vedanta battles for bauxite
15 April 2010
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[vedanta aluminium]
[project finance]
The project, which has a total cost of Rs314 billion, involves the development of a fully integrated aluminium operation comprising bauxite mining, an alumina refinery, captive power generation and an aluminium smelter. On completion, Vedanta will have a refining capacity of 5 million tonnes per year (tpy) at the existing 1 million tpy Lanjigarh refinery, a 1.75 million tpy smelting facility at Jharsuguda, captive power plants with a total capacity of 1.5GW, and bauxite sourced from the nearby Niyamgiri mine.
The project will be implemented in phases and is expected to generate cash before it reaches completion. Therefore, a portion of the early cashflow could be used to fund the equity portion. In the case of any shortfall in internal cashflow, Vedanta will inject quasi-equity into the project.
The use of local bauxite is key to the project. The existing Lanjigarh refinery, which began operations in September 2007,...
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