In response to a query from CNBC-TV18, the company said there has been no disruption to its current operations and the alumina refinery continues to operate in compliance with regulatory requirements.
The company further said that there was no damage to its red mud storage facility and the situation was completely under control.
Vedanta's statement said that they are currently prioritising community support.
How important is Lanjigarh Refinery?
In FY24, Vedanta's aluminium operations will source 40% of its aluminium requirement from captive sources and this number is expected to increase further due to capacity expansion of the alumina refinery.
If Vedanta has to buy from outside sources, it may have to incur an additional cost of $200 per tonne.
Brokerage firm PhillipCapital believes that if the situation worsens further and the alumina refinery is forced to shut or reduce production for a quarter, Vedanta's consolidated earnings before interest, tax, depreciation and amortisation (EBITDA) will decline by 3%.
Although the alumina unit is currently operational, the fear is that if the situation worsens from here, environmental issues could haunt the company, which could also result in a fall in the share price in the near future.
Vedanta shares closed lower on Monday after falling from the day's high. The stock is also off its opening high on Tuesday, and is trading 0.7% higher at ₹449.55.
See also | Aditya Velekar, Senior Research Analyst at Axis Securities discusses Vedanta's Lanjigarh dam breach and the metals sector on CNBC-TV18.
Vedanta shares have gained 75% so far in 2024.