Hindalco Shuts Alumina Plant In Jharkhand After Wall Collapse
Operations have been suspended to assess the situation and efforts are on to clear the spillage, says Hindalco.
Hindalco Industries Ltd. said it has temporarily shut its alumina plant in Muri, Jharkhand, after a contract worker went missing and four people sustained injuries when a red mud storage wall at the facility collapsed.
Operations have been suspended to assess the situation and efforts are on to clear the spillage, the company said in its exchange filing.
The company’s clarification comes after The Telegraph newspaper report stated that more than 20 workers were feared buried after a spillover of liquid industrial waste from its aluminium plant. The report also raised concerns over the liquid waste running into the Subarnarekha river that was less than 100 meters from the site.
The alumina maker, however, denied any material impact on the surrounding environment as well as on the company's performance.
Muri Plant produces 3.8 lakh tonnes of alumina and contributes 13 percent to the company’s overall production, according to BloombergQuint calculations.
Edelweiss Research, in a note, said the spillage will not have any financial impact and it is rather an environment social governance issue which will have some bearing on its stock. The company, it said, has enough inventory to ensure two months of operations.
Agreed, Ritesh Shah, research analyst at Investec. “If Muri refinery had to see operational shutdown because of regulatory issues, we don't see alloy production being impacted.” The company, he said, will have to bear higher freight costs due to the distance between alumina smelter and its feed.
The development, according to Motilal Oswal, is expected to have marginal impact on the company’s financials but more than that regulator backlash will be need to be watched out.