Vedanta to mothball Orissa refinery Vedanta Resources is to close indefinitely its $1bn Lanjigarh alumina refinery because of a lack of bauxite, raising serious questions about the future of the company's near-$6.5bn investment in aluminium refining in India's Orissa state. On Thursday, the India-based, London-listed mining conglomerate formally notified Orissa's government that it will temporarily shut down the 1m tonne refinery on December 5, when existing stockpiles of bauxite, and all further anticipated incoming supplies, will be exhausted. Vedanta, which has battled for nearly a decade to secure a supply of bauxite in Orissa, declined to offer any timeframe for the resumption of refining operations at Lanjigarh. "The depleting stock position of bauxite has come to a near end situation," the company said. We will have no means to arrange further regular supply of bauxite to sustain operations. Vedanta has invested in Orissa, one of India's poorest states, in the expectation that it would be able to tap into the region's rich bauxite deposits, refine the mineral and finally turn it into aluminium for what was expected to be India's rising demand for the metal. The company's investments include $1bn in the first 1m tonne phase of the Lanjigarh refinery; another $1bn towards a $2.2bn, 5m tonne expansion of the Lanjigarh facility; and $4.3bn towards a 1.7m tonne aluminium smelter, and 1200 megawatt dedicated power plant, at Jharsuguda. Vedanta expected these facilities to turn it into Asia's largest, and lowest-cost, integrated aluminium producer, and one of the biggest five in the world. However, India's government in 2010 rejected Vedanta's plans to source bauxite from the Niyamgiri Hills from a mountain deemed sacred to an 8,000-member indigenous tribe, the Dongria Kondh, after fierce local resistance and a sustained international campaign against the mining project. Activists had branded the mountain-worshipping tribe's struggle against the mining plan as a real-life version of the science fiction film Avatar, drawing support from celebrities such as Bianca Jagger, as well as Amnesty International, the human rights group. Vedanta's partner, Orissa Mining Corporation, has appealed to India's Supreme Court to reverse the government's decision, but the company faces the prospect of a protracted court battle. In the meantime, the Lanjigarh refinery has been operating at less than half its capacity, relying on bauxite from different mines across India, including its own sister company, Balco, in which the Indian government holds a 49 per cent stake. However, the licence for one of Balco's mines has expired and the renewal process is likely to take a long time. Vedanta officials said the aluminium smelter at Jharsuguda would continue operating with imported alumina, though it has also been operating at just a fraction of its capacity.