Hin­dalco faces Odisha baux­ite mine clo­sure

Resource Digest - - CONTENT -

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.

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