Hindustan Dorr-Oliver Wins $62.5 Million Vedanta Alumina Expansion Contract

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Researched by Industrial Info Resources (Sugar Land, Texas)--Hindustan Dorr-Oliver Limited (Mumbai), India's leading provider of engineering solutions, has been awarded a $62.5 million contract by Vedanta Alumina Limited, a subsidiary of Vedanta Resources PLC (LSE:VED) (London), for expansion work at Vedanta's 3 million-metric-ton-per-year (about 70,800 barrels per day (BBL/d)) greenfield alumina refinery project in the bauxite-rich Lanjigarh Village of Orissa's Kalahandi District. Under the contract, Dorr-Oliver will be responsible for the design, engineering, civil work, erection, construction, procurement, manufacture, supply, testing and commissioning, as well as for conducting performance-guarantee tests of settler and washer packages and associated facilities.

The company had commissioned a similar package for Vedanta's 1.4 million-metric-ton-per-year (about 33,000 BBL/d) alumina refinery at the same site. FLSmidth Dorr-Oliver Eimco GmBH (Walluf, Germany) will operate as the technology partner with Hindustan Dorr-Oliver in this project, which is expected to be complete in the next 17 months. Early last year, Dorr-Oliver had bagged a $7.5 million contract from Vedanta to design, engineer and construct an in-plant water-circulation and distribution-piping system, as well as compressed-air piping with accessories for Vedanta's 5 million-ton-per-year aluminum smelter plant in Jharsuguda, Orissa.

Vedanta has completed construction of the refinery in Lanjigarh with an investment of over $550 million and has begun trial production by procuring bauxite from external resources. It is awaiting a go-ahead from the Supreme Court of India to start mining operations at Niyamgiri, which is essential in making the project viable. However, the company has been facing stiff opposition from environmental activists and local residents who have been protesting against the threat of displacement from the ventures. The court ruled that a joint agreement by M/S Sterlite Industries Limited, Orissa Mining Corporation and Orissa's government will be required to comply with a rehabilitation package in order to receive clearance. Farmers have been protesting against the state government's move to divert water from the Hirakud dam for industrial ventures, potentially jeopardizing Vedanta's $2.1 billion smelter-plant project in Jharsuguda. Vedanta Resources PLC has been blacklisted by the Government Pension Fund of Norway, which withdrew its investment of more than $14 million from the company on account of potential damage the company could cause to the environment and unfavorable conditions to residents.

Because Orissa has a large reserve of bauxite, about 1.8 billion tons, as well as power and coal, it has come to be an investment hotspot for domestic and international enterprises. About 71% of India's known reserves of the aluminum ore are in Orissa. The country is the eighth-largest producer of aluminum in the world; however, the industry is highly concentrated with only five plants accounting for the entire production capacity of 1.2 million tons per year in the country. Of this, nearly 35% is consumed by the Power Industry. India's per-capita consumption of aluminum, at only 800 grams, is far less than the global average: 10 kilograms (kg) in Europe, 19 kg in Japan and 25 kg in the U.S. India's demand for aluminum is expected to grow 14% this year because of the burgeoning automotive, construction and consumer-durables sectors, which account for 40% of the total aluminum consumption. By 2020, the country is expected to have an installed aluminum capacity of 1.7 million to 2 million tons per year.

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