Vedanta to invest up to $2.9 bln over 3 years in key India plants

* Plans to expand alumina refinery, aluminium smelter in Odisha

* Still in talks with state entity to get bauxite locally

* Sees OPEC production cut as a positive for oil business (Adds quotes, details)

By Devidutta Tripathy and Jatindra Dash

BHUBANESWAR, India, Dec (Shanghai: 600875.SS - news) 1 (Reuters) - Vedanta Resources Plc (Other OTC: VDNRF - news) plans to invest as much as 200 billion rupees ($2.9 billion) over three years to expand its alumina and aluminium producing capacity in eastern India's Odisha state, its chairman Anil Agarwal said.

The company plans to expand the capacity of its Lanjigarh alumina refinery to 5 million tonnes from the current 2 million tonnes and double the capacity of its Jharsuguda aluminium smelter to 2 million tonnes.

Vedanta has been trying to expand the capacity of its refinery for almost 8 years but a lack of availability of bauxite, the raw material which is refined to make alumina, has proved a hurdle.

Vedanta, which currently buys bauxite from elsewhere to feed the plant, is still in talks with state-run Odisha Mining Corp to get access to the raw material locally, Agarwal said in the state's capital where he was attending an investment summit.

"We are looking forward to some bauxite strategy to come," the metals tycoon said in a group interview.

He said Vedanta, which has already invested 600 billion rupees to build the refinery and smelter, will need to put in a further 150 billion to 200 billion rupees to expand capacity.

Vedanta would also be interested in bidding for iron ore mines in the mineral-rich state and elsewhere in India in state auctions, Agarwal said.

Vedanta's Cairn India (BSE: CAIRN.BO - news) unit produces oil in the country.

Agarwal said the Organization of the Petroleum Exporting Countries' decision to reduce oil output for the first time since 2008 was a positive.

"Good for us," he said. "Prices will increase a bit."

Vedanta has previously said it planned to invest about 300 billion rupees to augment its oil production capacity. ($1 = 68.3355 Indian rupees) (Reporting by Devidutta Tripathy and Jatindra Dash; Writing by Promit Mukherjee, editing by David Evans)