Hindalco gets green nod for Orissa alumina refinery

Hindalco Industries, the country's largest aluminium producer, has received the final forest clearance for its proposed 1.5-million-tonne, Rs 6,000-crore alumina refinery project in Orissa’s Rayagada district. The Aditya Birla Group flagship company is now expediting the project, especially to achieve financial closure soon.

The Aditya alumina project is slated to go on stream in 2014. The first stage of the project has an aluminium smelter plant in Orissa.

“We have got the stage-2 clearance for the project last week and are now working on the financial closure,” Managing Director Debu Bhattacharya told Business Standard. He said the company was also looking at “other” kinds of funding for the project.

Elaborating, Bhattacharya said, “We went for a qualified institutional placement (QIP) last year. Now, I am not saying that we are going for another QIP to raise money for this project but we are looking at all possible instruments to raise money.”

Adding, “The forest area on the project site needs to be diverted and the stage-2 clearance was needed to do that. We can now go ahead with the project with full steam.”

He said the target for debt-to-equity ratio for the project was 1:1. “Right now, we have plenty of room to leverage our balance sheet, as the current ratio is 0.24:1.” He did not give details, saying it would be premature to say more on funding at this stage.

In 2010-11, Hindalco spent Rs 6,500 crore on new project expansion, majorly on Utkal ( also in Rayagada district of Orissa), Mahan (Sidhi district of Madhya Pradesh) and a bit on the existing Aditya project as well.

The Aditya project has an aluminium smelter plant of a capacity of 359 kilo tonnes per annum (ktpa), with a 900-Mw power project for its captive use. The project is expected to be commissioned by the end of 2012 and has received the necessary approvals. The total cost is Rs 9,200 crore, except the financing charges.

The second leg of the project, for which it has got the forest clearance, will have an alumina refinery with a capacity of 1.5 million tonnes per year. This is slated to be commissioned by the end of 2014.

Hindalco, on March 31, achieved financial closure for its Rs 10,500-crore Mahan aluminium smelter project. The project will have a total smelting capacity of 359 ktpa, with a 900 Mw power capacity. The debt-to-equity ratio for this project is 75:25, with a rupee loan agreement worth Rs 7,875 crore signed with banks.