Vedanta’s efforts to get alumina from Nalco have
become successful as the Supreme Court recently directed Nalco to
allocate 90,000 MT of alumina to the Vedanta Resource Limited, UK
(VRL-UK). Vedanta, a serious competitor of Nalco in aluminium
business, will be greatly benefited by this.
While directing Nalco to allocate alumina for a period commencing
from May 1, 2022 to July 31, 2022, the court’s Bench of Justices DY
Chandrachud, AS Bopanna and V Ramasubramanian said the price
which shall be payable by VRL UK to Nalco would be of weighted
average of the six bids of VRL UK where it was the highest bidder.
The Bench issued the direction while hearing a contempt petition by
Vedanta Ltd against Nalco over non-compliance of the court’s order on
January 14, 2020 by which the court had allowed Vedanta to bid for
Nalco's alumina tenders meant for exports.
The Vedanta Resource Limited, which had emerged as successful bidder
for the Nalco tender, was refused to take the consignment to its SEZ unit
and insisted on terminating the transaction at the Visakhapatnam Port.
The producer also asked VRL to obtain Let Export Order (LET), a
mandatory requirement for the purpose of completion of the transaction,
from the Customs authorities at the Visakhapatnam Port.
This had resulted in Vedanta preferring a contempt petition alleging
"wilful disobedience" of the January 14, 2020 order. Vedanta had
alleged that Nalco was not making delivery at the port on FOB basis.
In the first contempt preferred, the SC on August 19, 2020 had directed
Nalco to ensure delivery of calcined alumina to Vedanta at
Visakhapatnam on FOB basis to be used in Vedanta's SEZ unit at
Jharsuguda. The counsel for Nalco had agreed in effecting delivery if it
was meant to be used in Vedanta Limited SEZ at Jharsuguda and even
Vedanta had agreed to provide the bill of export and necessary
certification under Rule 30 of the SEZ Rules.
Vedanta is getting as much as 90,000 MT of alumina from Nalco at a
time when aluminium price has been rallying for weeks to record high
LME prices due to the Russia-Ukraine war and the global aluminium
market is facing a deficit due to production cuts in Europe amid high
energy prices.