About 2,000 villagers Wednesday staged demonstration in Odisha's Kalahandi district, demanding allocation of bauxite to the alumina refinery of Vedanta Aluminum Limited (VAL) in the region, police said.

The project supporters also took out a march and held a public meeting at Lanjigarh town, the home of the plant, as they fear loss of jobs in case the refinery was shut down, a senior district police official said.

Set up at an investment of $800 million, the VAL plant requires three lakh tonnes of bauxite per month to run the alumina refinery at Lanjigarh, about 600 km from here, at full capacity. However, due to bauxite shortage, the company is running the one-million-tonne per annum refinery at 40-50 percent of its capacity for the past several days.

"If this scarcity continues, then it is anticipated that there will be a stoppage of production," said Sridhara Pesnia, president of the Lanjigarh Anchalika Vikash Parishad (LAVP), an organisation which has been leading the agitation in support of Vedanta.

The refinery was commissioned in August 2007.

Pesnia said the refinery should be provided bauxite from Odisha as thousands of local residents depend upon it for their livelihood. "We will meet the state chief minister and, if required, will visit Delhi to meet the prime minister if bauxite is not given to Vedanta," he added.

Bauxite is the main raw material used to produce alumina.

Vedanta wants to mine bauxite from Niyamgiri Hills located near its refinery but environmental and other clearances for this have been mired in litigation and protests. It has also applied for several other bauxite reserves in the state, but none of them have materialised so far.