In talks with Vedanta to supply bauxite: GMDC

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In an interview with CNBC-TV18's Managing Editor Udayan Mukherjee, VS Gadhvi, MD, GMDC , spoke about the latest happenings in his company and sector.

Here is a verbatim transcript of the exclusive interview with VS Gadhvi on CNBC-TV18. Also watch the accompanying video.

Q: Can you take us through the tender which was opened recently for bauxite?

A: I can tell you that bauxite is one of the mining GMDC is dealing with. As per the state government's policy, which has been declared in November 2009, it has been clarified that the additional mining leases will be reserved only for the GMDC. GMDC will be the sole distributor of the bauxite minerals, except those who are having the captive mines.

Coming to Vedanta, during the process of mining we generate plant grade bauxite and metallurgical bauxite, which is the popularly known as medium grade bauxite. So, obviously we are having a stock of medium grade bauxite, right now more than 9 lakh tones. Normally, our process is through transparent bidding. So, in August, we issued a tender, asked for offers from various parties, so the various parties have offered their prices and Vedanta is one of them. They have asked for little more than 5 lakh tonne of medium-grade metallurgical bauxite.

Q: So it is not true that you are talking to Vedanta for selling a lion share of the bauxite output that you have 7-8 lakh tonne?

A: We want to dispose off all the 9 lakh tonne of bauxite who offers us the higher prices. But Vedanta has initially opted for 5 lakh tonne of bauxite, they have offered their prices. We are, right now, examining the various prices and various terms and conditions for the sales deal. I think within next ten days we should be able to finalise on the deal.

Q: What is the market value you think given your estimates of price of 9 lakh tonne of bauxite?

A: Bauxite is always in demand and supply is less than the demand. But the point is it has also lot of relation with the international market, the demand in gulf countries, some of the European countries and all that. Presently, market is picking up, it was not so good before two-three months, but now it is picking up.

Looking to that circumstance, we will be having good benefit out of the disposal of this market because earlier when we tried to dispose off some of the bauxite material, the range we could get was around 550 per tonne. But this time we could expect more than 600 per tonne.

Q: What is the total revenue possibility from here for 9 lakh tonne?

A: This is 9 lakh tonne but beyond that also we have some stakes available with us, so during this financial year also we are planning to dispose off the bauxite worth more than Rs 25-35 crore. Ultimately, it will also depend on the prevailing rates at a particular point of time.