Mumbai, Oct. 7: Vedanta Aluminium has put on hold its expansion plans at the Lanjigarh alumina refinery in Orissa after the Centre recently rejected the proposal to mine bauxite in the Niyamgiri hills.

“Since final clearance was not granted for bauxite mining at Niyamgiri, we have reviewed our capital expenditure programme. Accordingly, further work on the refinery expansion project has been put on hold, and the first metal tapping at the 1.25-million-tonne Jharsuguda-II smelter and the 3.25-lakh-tonne Korba smelter projects is also being temporarily deferred,” Vedanta Resources Plc, the group holding company, said in a statement today.

That’s not all: Vedanta has also decided to start merchant sales of electricity generated from its 2400mw power plant established by Sterlite Energy and the 1200mw Balco power plant.

The move has been precipitated by the decision to halt its aluminium refinery expansion programme.

Vedanta Aluminium had been looking to expand the capacity of the refinery to 6 million tonnes from 1 million tonnes at present.

In August, the Centre did not give clearance to Orissa Mining Corporation to mine the Niyamgiri hills for Vedanta’s aluminium refinery at Lanjigarh.

Vedanta said it was engaged in discussions with the Orissa government for the allocation of new bauxite deposits in accordance with a memorandum of understanding for the supply of 1.5 lakh tonnes of bauxite.

Till an alternative bauxite source is identified, the Lanjigarh refinery will continue to operate at a capacity of 1 million tonnes per annum using bauxite sourced from Balco and third parties.

In its production report for the second quarter and the first half, Vedanta said aluminium production was 162,000 tonnes for the three-month period, an increase of 35 per cent over the corresponding prior quarter, with the 5-lakh-tonne Jharsuguda-I smelter contributing 97,000 tonnes. Production in the first half was 302,000 tonnes, 23 per cent higher than the corresponding prior period.

Copper cathode production at the Tuticorin smelter during the quarter was 68,000 tonnes, 25 per cent lower than the corresponding prior quarter because of the planned bi-annual maintenance shutdown for 22 days that began on June 22.

Production of copper cathode in the six-month period ended September 30 was 145,000 tonnes against 169,000 tonnes in the corresponding prior period.