Facing acute shortage of alumina for its smelter at Jharsuguda, Vedanta Aluminium has asked the Odisha government to impress upon National Aluminium Company (Nalco) to sell surplus alumina to it.

"We earnestly request you to impress upon Nalco to start selling/allow participation of smelter companies located in Odisha, which would be treated as deemed exports for Nalco in its alumina tenders, so that the same can be utilised for increasing revenues for the exchequer, ensuring value addition and also generation of employment opportunities," Vedanta Aluminium Managing Director S K Roongta said in a letter to Odisha's Chief Secretary J K Mohapatra.

Rungta said: "The diversion of surplus alumina to Vedanta Aluminium's alumina smelter will generate extra revenue for Nalco at around Rs 200 crore annually over and above its export realisation, thus helping improve its financial balance sheet."

As Vedanta Aluminium's refinery at Lanjigarh in Kalahandi district is running at a depleted capacity of 30-40 per cent on outsourced bauxite from states such as Gujarat, Chhattisgarh and Jharkhand. This has been hurting alumina availability for its smelter plants, Roongta said.

Roongta also informed the state government that his company's request to Nalco for allowing it to participate in the tender was not responded. "We are sorry to state that the request has not been entertained till date," he said.

Meanwhile, the steel and mines department of Odisha government has sought views of Nalco on the proposal of Vedanta Aluminium.

Roongta said VAL has two smelters at Jharsuguda. The 0.5-million tonne per annum (mtpa) smelter plant, supported by a 1,215 Mw captive power plant, produces downstream products such as wire rods and billets. This unit is in operation and is meeting its alumina requirement through imports.

The other smelting facility of 1.2 mtpa capacity has been installed as a special economic zone (SEZ) unit. This is yet to be commissioned due to non-availability of alumina.

Overall performance of Vedanta's smelter was hit after Lanjigarh refining facility faced shutdown between December 5, 2012 and July 11, 2013 as bauxite sources dried up, sources said.

Nalco had earlier turned down VAL's request to allow it to participate in the tendering process for sale of surplus alumina. Vedanta had offered a premium of 7-10 per cent over Nalco's export price of alumina.

Referring to state government's resolution seeking reservation of at least 50 per cent of iron ore for state -based industries, Vedanta Aluminium has sought similar reservation of alumina for the local units.

Justifying its offer to the PSU, Vedanta Aluminium said Nalco could reduce transportation costs by up to USD 25 a tonne in moving alumina from its refining complex at Damanjodi to Visakhapatnam port.

"The savings would accrue railway freight, port- handling charges, operations and maintenance and port-loading and unloading charges," Roongta said in the letter to the Chief Secretary.