Reports suggest that alumina production of Vedanta Resources, of which Vedanta Aluminium is an associate, declined 43 per cent to 527,000 tonne in 2012-13 mainly because of the closure of Lanjigarh refinery in Odisha.

Vedanta Aluminium had to close the 1 million tonne (mn t) alumina refinery at Lanjigarh because of lack of the key raw material bauxite.

In the absence of supply from Lanjigarh refinery, Vedanta perforce has to get the intermediate raw material alumina from multiple sources to keep the 500,000-tonne smelter at Jharsuguda running.

The company is said to be incurring huge extra cost in sourcing alumina from different parts of the country. The reason why India is seen as a highly cost-effective aluminium production centre is because it facilitates fully integrated operations from bauxite mining to alumina refining to metal smelting backed by low-cost coal fired power. All aluminium cost calculations for Vedanta have, however, gone haywire because of the Lanjigarh refinery impasse.

The cancellation of stage-two environment clearance prevented Vedanta to mine bauxite from the Niyamgiri hills. Refinery operations were finally suspended on December 5, 2012.