Nalco cuts costs to combat price fall

With the international aluminium price at London Metal Exchange (LME) plummeting to an alarmingly low level of 1430 US dollars per tonne, the Navaratna Company Nalco has tightened its belt to combat the fall out of the financial meltdown.

The continuous downslide in price has compelled the company to reduce its domestic aluminium price by Rs 10000 per tonne. It is for the fifth time in last three months, Nalco has cut its domestic price. The LME aluminium price was 3000 dollars per tonne in July this year.

For its own sustenance, Nalco has taken a number of austerity measures including cutting down expenses and discarding use of imported coal at its power plant to minimize the cost of production.

According a sources, Nalco does not have any plan to cut down aluminium output at its Angul smelter plant due to fall in prices. It produces about 1000 tonne of aluminium per a day from its 719 pots at the smelter plant. Sources say, the company authorities have cut down expenses in non-essential fronts to reduce overhead costs. It includes entertainment, administrative and other expenditures which were avoidable in nature.

Besides, as power constitutes about 33 to 35 per cent of the cost of aluminium production, Nalco authorities have decided to curtail the use of more expensive imported coal and depend on the domestic coal sourced from nearby Talcher Coalfields to generate power at the CPP.

In spite of its stock of 76,000 tonne of imported coal at its stock yard, the company has discontinued its use because per tonne cost of import coal is about Rs 8,500 whereas the price of domestic coal is only Rs 850.

The company has at present a stock of about 1.60 lakh tonne of domestic coal besides drawing about 15000 tonne of coal from the linked mines of Talcher Coalfield.