Nalco plans Rs 14k-cr unit in Orissa

The capacity of the proposed smelter is pegged at 5 lakh tonnes per annum with a captive generation facility of 1,250 mw. The alumina required for the project is likely to be sourced from Nalco's existing refinery at Damanjodi.

Engineer's India (EIL), which has been appointed the consultant, has found the project technically feasible.

Jharsuguda is being chosen as the possible site for the plant as it is in the vicinity of the IB valley coal reserves. While the company has the required technology, land acquisition is expected to be trouble-free as most part of the identified patch is government land and barren.

Though the company has been refused a coal block for the project, the coal ministry has assured the company of a long-term coal linkage from the Mahanadi Coalfields (MCL) mines.

However, the availability of water poses a serious problem to successful completion of the project.

Though the consultants in their pre-feasibility report have suggested that the water can be sourced from the IB river, it may not be an easy option, particularly in light of recent farmer unrest in the area.

"Yes, we have plans to set up a smelter and captive power plant in Jharsuguda to add about 9 lakh tonne alumina capacity which is exported annually now. The project's fate does not hinge on the availability of water," B L Bagra, director (finance), Nalco, told Business Standard.

Meanwhile, the state-owned Industrial Promotion and Investment Corporation of Orissa (Ipicol) has forwarded the company's application for water from IB river to the water resources department.

Providing water to the proposed plant from the river will depend on the priority of the state government, official sources said. Besides, the company is weighing various options for setting up smelter plants in countries like South Africa and Iran depending upon the availability of cheap power.

A high-level company delegation recently visited South Africa to explore the possibility of setting up a plant there but nothing has been finalised yet. The company intends to set up a 5 lakh tonne per annum smelter and 1,260 mw captive power plant in two phases in the African nation.

Similarly, it has entered into a memorandum of understanding (MoU) with the Kerman Development Organisation for setting up a smelter and subsequently a gas-based power plant in Iran in a joint venture.

The capacity of the proposed smelter will be 3.1 lakh tonnes which will come up in two phases.