State Cabinet clears bauxite linkage policy

BHUBANESWAR: The State Cabinet on Wednesday cleared three proposals including that of the Steel and Mines department for long-term linkage of bauxite to end-user industries.“The Cabinet approved amendment of long-term linkage policy to specify detailed guidelines for bauxite linkage. As per the amended policy, 70 per cent of the saleable stock of bauxite will be made available for long-term linkage and the balance 30 per cent will be sold through national e-auction,” Chief Secretary Aditya Prasad Padhi said after the Cabinet meeting.

The weighted average price derived from the national e-auction will be the long-term linkage price. The floor price for the national e-auction will be kept at cost of production with a profit margin of 50 per cent.
“As a general principle in the national e-auction, Odisha Mining Corporation (OMC) will directly deal with the end-user industries. Participation by traders will be considered only if there is persistent lack of adequate response from end-user industries,” Padhi said.

The State Government’s move will benefit Vedanta which has been struggling to arrange raw materials for its refinery plant at Lanjigarh in Kalahandi district. The refinery is currently sourcing bauxite from other States and abroad.The decision of the Cabinet will enable Vedanta to purchase bauxite from OMC on long term basis at market price discovered through auction in a transparent manner, the Chief Secretary said.
Though the State has bauxite reserves of about 1968.86 million tonnes, the annual production is only about 9.2 million tonnes. The Cabinet decided to operationalise more bauxite blocks through outsourcing.

Padhi said OMC will expedite statutory clearances for the bauxite blocks assigned to it. If the progress will not be satisfactory, the blocks assigned to OMC will be surrendered and auctioned. “Part of the Kalrapat block, excluding the mining leases area granted to OMC, will be dereserved and auctioned for prospecting-cum-mining lease for expeditious exploitation of bauxite,” he said. 

The State Government had constituted a committee under the chairmanship of the Chief Secretary to make appropriate recommendations for bauxite supply to Vedanta’s Lanjigarh refinery through OMC.In another decision, the State Cabinet on Wednesday approved appointment of  Laxmi Charan Patnaik as Chairman of Odisha Public Service Commission (OPSC) and former bureaucrat Jagannath Mohanty as member of the Commission. Both of them had been appointed on January 17, 2018 in anticipation of Cabinet approval.