Vedanta Reports Record Aluminium Production but Faces Cost Pressures
Vedanta Aluminium reported strong performance in the second quarter of fiscal 2027, with record production figures in both aluminium and alumina. Aluminium output increased by 5% year-on-year to 649,000 tonnes, while alumina production surged by 37% to a record 895,000 tonnes. For the first half of FY2027, aluminium production rose 5% to 1.281 million tonnes, and alumina production climbed 39% to 1.721 million tonnes, driven by capacity expansions and operational improvements.
The company also saw growth in its zinc and steel operations. Zinc India’s refined metal production reached a quarterly record of 264,000 tonnes, up 7% year-on-year, while saleable steel production increased by 4% to 532,000 tonnes. Power sales saw a significant boost, rising 26% to 5,593 million units.
However, Vedanta’s operating performance was mixed. Saleable iron ore production declined by 13% year-on-year to 1.52 million dry metric tonnes, and average daily gross operated oil and gas production fell 19% to 72.2 thousand barrels of oil equivalent per day.
The company faces additional challenges due to raw-material cost pressures following the Odisha High Court’s dismissal of Vedanta’s petition seeking bauxite supplies under a historical pricing arrangement. Brokerage CLSA estimated that this ruling could increase production costs by around $10/tonne from Q1 FY2027 levels. OMC has issued Vedanta Aluminium a demand notice for ₹5,600 crore, payable by October 31, 2026, with a potential one-time financial impact of up to $290 million, including interest. Vedanta is reviewing the judgment and evaluating its legal options.