Corporate Grapevine     

Published: September 15, 2025
Updated: September 15, 2025

Viceroy aims bauxite barb at Vedanta

Vedanta Limited’s alumina business has come under renewed pressure as delays at its proposed Sijimali bauxite mine threaten the viability of the company’s Lanjigarh refinery in Odisha, as per short seller Viceroy Research.

The refinery has operated without captive bauxite for over 15 years, relying instead on costly and inconsistent third-party supplies. Production has stalled and margins have been squeezed by rising input costs and supply volatility, even as Vedanta has poured fresh capital into expanding the facility. Analysts at Viceroy warn that without a secure local source, expansions could worsen financial stress.

Sijimali, expected to supply 9-12 million tonnes of bauxite annually, is seen as critical to the refinery, which will need 18 million tonnes once expansions are complete. However, the project has been mired in controversy. Tribal protests have intensified, with reports of police action, detentions and allegations of forged consents submitted in support of the mine. Several villages have passed fresh resolutions rejecting the project, while petitions challenging the validity of approvals are pending in the Orissa High Court.

LEGAL TROUBLE

In September 2025, the Union Environment Ministry deferred Stage 1 forest clearance, citing unresolved issues of community consent under the Forest Rights Act and gaps in the state government’s application. Civil society groups have accused Vedanta and local authorities of coercion and procedural violations.

The management had earlier guided toward production at Sijimali by Q3FY25, later pushing the target to Q4FY26. The latest regulatory setback makes even that revised timeline unrealistic. Despite this, some analyst models still project initial output of 1-1.5 million tonnes in FY26.

With both the Sijimali mine and a proposed group demerger slipping beyond this fiscal year, sell-side analysts say Vedanta’s key catalysts have effectively disappeared, amounting to a profit warning for FY26. A PIL filed in the Supreme Court on ‘no action’ taken by Indian government authorities, including Sebi and RBI, is expected to be heard soon.

Meanwhile, dividend upstreaming from Vedanta Ltd to unlisted Vedanta Plc continues.