The Orissa High Court on Thursday dismissed Vedanta's plea to revive and enforce a 2004 agreement under which it claimed the Odisha Mining Corporation (OMC) committed to supplying 150 million tonnes of bauxite at a specified price. A division bench of Chief Justice Harish Tandon and Justice Murahari Sri Raman held that the doctrine of promissory estoppel cannot be used to compel the state to act contrary to statutory provisions or to confer an enforceable commercial right over natural resources held in public trust. The court dismissed the writ petition, vacated interim orders and allowed OMC to take follow-up action according to law. The ruling could sharply raise the cost of bauxite for Vedanta's aluminium business, putting pressure on a key cost advantage for one of India's largest producers of the metal. The dispute dates back to 2003 when an MoU was executed between the Odisha government and Sterlite Industries (Vedanta's predecessor) to set up an alumina refinery complex at Lanjigarh, followed by the 2004 agreement between OMC and Vedanta for bauxite supply.
Vedanta Group Chairman Anil Agarwal has urged the Odisha government to accelerate its proposed ₹1 trillion investment in the state to expand its aluminium operations, including a 3 million tonne per annum (mtpa) smelter in Dhenkanal and a 6 mtpa alumina refinery in Rayagada. According to the Chief Minister's Office (CMO), Agarwal discussed the proposed investments with Chief Minister Mohan Charan Majhi at Lok Seva Bhawan in Bhubaneswar on Saturday. The Vedanta chairman emphasized that the investments are aimed at building a globally competitive industrial ecosystem around aluminium and supporting India's requirements in infrastructure, energy transition, advanced manufacturing and emerging technologies. As reported by the CMO, Agarwal reaffirmed Vedanta's commitment to Odisha, where the company has had a presence for more than two decades.
The ruling is significant as bauxite is the key raw material for Vedanta's Lanjigarh refinery, which supplies alumina to its aluminium smelters. Vedanta had argued that it had invested more than ₹6,000 crore in setting up its Lanjigarh alumina refinery and had to initially source bauxite from outside because supplies from the proposed mines did not begin. This led to losses of more than ₹3,000 crore, according to the company's court submission. The dispute arose after Odisha changed the pricing mechanism following a 2019 amendment to Rule 45 of the Minerals (Other than Atomic and Hydro Carbon Energy Minerals) Concession Rules. The state directed OMC to use the Average Sale Price method to determine the floor price for bauxite sold through national e-auctions, which Vedanta challenged, arguing the rule was meant for mine auctions and not for commercial sale of already-mined bauxite. The court rejected Vedanta's argument, noting that OMC had terminated the earlier joint-venture agreements in September 2015 following changes to the Mines and Minerals (Development and Regulation) Act.
As part of its expansion plans in Jharsuguda, Vedanta is considering setting up a 2-million-tonne plant with around 500 acres of land being made available near the company's existing power plant for the proposed expansion. According to Agarwal, the project could generate at least 50,000 jobs, both directly and indirectly. The company has also proposed a 1 mtpa brownfield expansion of its existing aluminium smelter at Jharsuguda, which would further increase its production capacity in the state. The Vedanta chairman indicated that the pace of implementation would depend largely on how quickly land is allotted and the required government clearances are granted.
Vedanta is looking at setting up another refinery in Rayagada, along with the proposed 6 mtpa alumina refinery. The company is also planning to advance its work in bauxite and aluminium production while expanding its existing operations in Jharsuguda. The proposed Dhenkanal smelter is expected to supply hot metal to Vedanta's downstream aluminium parks in Odisha, potentially supporting greater value addition and the development of aluminium-based manufacturing in the state. Once the proposed projects are completed, Vedanta's cumulative aluminium production capacity will reach around 6 mtpa, significantly expanding from its current operations at Jharsuguda and Lanjigarh.
According to the CMO, the upcoming projects are expected to generate more than 200,000 direct and indirect employment opportunities. The investment could have a wider multiplier effect across logistics, infrastructure, engineering, ancillary industries and supplier networks, potentially supporting more than 20 lakh livelihood opportunities. As reported by the CMO, Chief Minister Majhi said the state government would step up efforts to facilitate the early implementation of the projects, stating that "the government is keen to create large-scale employment opportunities for Odisha's youth and would extend all possible support to investments with significant potential for job creation and local economic development." Agarwal highlighted that "Odisha has the potential to manufacture 150-200 different aluminium-based products. Aluminium is used across a wide range of industries, from aircraft and trains to buses and automobiles. This presents opportunities for businesses ranging from ₹5 crore to ₹500 crore to set up manufacturing units in the state."
The investment plan extends beyond industrial projects to include social infrastructure development. Vedanta has announced plans to establish a 1,000-bed hospital in western Odisha, adding a healthcare component to its proposed expansion. The company is also looking at projects including a large hospital for tribal communities, a digital university and a research-focused hospital. The proposed research facility could work towards developing medicines for major diseases, including cancer. The state government has already allocated land for the alumina refinery in Rayagada and the power plant and aluminium smelter projects in Dhenkanal, with development of supporting infrastructure currently underway.
