Hindalco faces Odisha bauxite mine closure
Hindalco Industries Ltd., India’s second-largest producer of aluminum, may have to halt mining at its biggest bauxite reserve after part of the land was recently deemed forest, requiring a new permit, people with knowledge of the matter said.
The company needs to obtain approvals by March 9 and is running out of time, one of these people said. Hindalco has already filed the papers and Odisha, where the mine is located, needs to decide whether to extend the deadline, another person said. When Hindalco won the lease more than a decade ago, the area wasn’t marked as forest land, both said, asking not to be identified as they aren’t authorized to speak on the subject.
Failure to get the license in time may either force Hindalco to cut aluminum production or import ore, which may further dent earnings at a time prices of the light-weight metal are at a sixyear low. The company, controlled by Kumar Mangalam Birla, is grappling with debt that has more than doubled to about $11 billion in the last four years as cheaper imports from China weigh on profit.
The Mumbai-based metals producer started operations in the Baphlimali mine in 2013 and was informed about two years later that it needs a permit to excavate 230 hectare (568 acre) of forest land out of the total 1,388.74 hectare, one of the people said. It may take at least a year to win the forest permit, the person said.
Pragnya Ram, the Mumbai-based spokeswoman for Hindalco, didn’t respond to an e-mail or answer calls made to her mobile phone. Debidutta Biswal, special secretary at Odisha’s forest department, declined to comment.
A forest department circular issued in March 2015 noted that while approving mining leases, substantial forest areas included in contracts with companies such as Hindalco were recorded as non-forest land.