Vedanta Gets Top Court Nod to Bid for Nalco’s Alumina Tenders
Shares of Vedanta gained as much as 3.5% to the highest since September in Mumbai, while Nalco jumped 2%.
(Bloomberg) -- India’s top court has allowed Vedanta Ltd. to bid for alumina sale tenders by state-run National Aluminium Co., providing some relief to Anil Agarwal’s aluminum unit that is seeking to boost supplies of the raw material.
A three-judge Supreme Court panel said Vedanta’s foreign units can bid for Nalco’s alumina tenders meant for exports. If Vedanta’s bid is successful, the company can use the raw material at its Jharsuguda plant in the eastern state of Odisha after picking it up from Visakhapatnam port, it said.
Nalco had challenged an Odisha High Court decision last year that allowed Vedanta to take part in the tenders for the sale of its surplus alumina. At the time, the lower court had accepted Vedanta’s argument that it was eligible to participate in the tenders as it operated from an export-oriented zone.
Vedanta has an alumina refinery and a smelter in Odisha but lacks adequate bauxite supplies after the tribes of Niyamgiri stopped its bid to mine in the remote hills. That forced the company to buy from other local miners or import alumina. Alumina is of increasing value to the company as it embarks on a plan to raise aluminum smelter production capability by 30% to 3 million tons in the next couple of years.
Nalco exported 1.24 million tons of alumina in the year ended March 2019. Its refinery has the capacity to produce 2.28 million tons of alumina a year and exports its surplus to buyers mostly in the Middle East, Southeast Asia and China.
Shares of Vedanta gained as much as 3.5% to the highest since September in Mumbai, while Nalco jumped 2%. The benchmark S&P BSE Sensex was little changed at 12:56 p.m. local time.
--With assistance from Swansy Afonso.
To contact the reporter on this story: Upmanyu Trivedi in New Delhi at utrivedi2@bloomberg.net
To contact the editors responsible for this story: Phoebe Sedgman at psedgman2@bloomberg.net, Alpana Sarma
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