Nalco plans caustic soda plant at Paradip to counter soaring costs

Visibly worried over soaring costs of inputs, National Aluminium Company (Nalco) is contemplating a second caustic soda plant within the planned PCPIR (petroleum, chemicals & petrochemicals investment region) hub at Paradip.

Nalco already has a joint venture with Gujarat Alkalies & Chemicals Ltd, a Gujarat government company, to set up a caustic soda plant at Dahej with a cost of Rs 1800 crore. The caustic soda projects would cocoon Nalco from volatile caustic soda prices, said T K Chand, the company's chairman and managing director.

"At Nalco, we felt we should have our captive caustic soda production. Our caustic soda plant in Gujarat is in the advanced stage of construction. We are also planning one more caustic soda plant at Paradip PCPIR and if IOC (Indian Oil Corporation) gives ethylene, we will set up the plant. Discussions are on for this project and some decisions might be taken on January 5 when Union petroleum minister visits Odisha", he said.

Chand said the aluminium industry is facing a severe shortage of raw materials as China which produced key inputs like caustic soda, petroleum coke and aluminium flouride has shut many projects on pollution concerns.

"Aluminium production in India has shot up from the level of 2.4 million tonnes two years back to 3.7 million tonnes in last fiscal. There is a fight for raw materials between the three aluminium producers", he added.

The Nalco CMD went on to explain how the Indian aluminium producers were at a disadvantage vis-a-vis their counterparts in West Asia where smelters get natural gas at throwaway prices. Besides, there are countries where cheaper hydropower fired the aluminium smelters. In contrast, the Indian aluminium players use costlier coal and so, our power cost is 10 times that of the smelter units in West Asia, he reasoned.

Chand said Nalco's focus was on pruning cost of aluminium production. "We want to increase the volume of production. Nalco is going for brownfield expansion of its Angul smelter by adding 0.6 million tonne capacity at a cost of Rs 12,000 crore".

Nalco also hopes to commence mining from its captive Utkal-D and E coal blocks this year. Coal mining is projected to give relief of Rs 500 per tonne to Nalco on its aluminium making cost.

Meanwhile, Nalco has opened its South Block bauxite mines at Panchpatmalli in Koraput district. "Nalco has Rs 600 crore Capex (Capital expenditure) on this mine which will have a capacity of 3.1 million tonnes per annum. This mine would fully cater to Nalco's alumina refinery requirement till the time Pottangi mines start operations."

Besides this, Nalco has developed 18.5 Mw steam power plant at Damanjodi and nanotechnology-based defluoridation plant at its Angul aluminium. These two projects along with the South Block mines at Panchpatmalli would be dedicated to the nation on January 5, Nalco's Foundation Day, coinciding with the visit of Union mines minister Narendra Singh Tomar and Minister for Petroleum & Natural Gas and Skill Development Dharmendra Pradhan.

Nalco expects to perform the groundbreaking ceremony for its new, one million tonne alumina stream at its Damanjodi refinery within a month. The aluminium major is investing Rs 5500 crore on this expansion.