Nalco to buy 80% power from proposed JV plant

National Aluminium Company (Nalco) has agreed to buy 80 per cent of the power to be generated by the 2,400-Mw coal-based power plant proposed at Gajamara in Odisha’s Dhenkanal district. The power plant, estimated to cost Rs 14,000 crore, is being set up by Nalco jointly with NTPC.

“Nalco will be buying 80 per cent of the power which will be used for feeding our planned greenfield aluminium smelter at Kamakhyanagar close to the site chosen for the power station. Rest of the power will be sold by NTPC to other sources. We will shortly form the JV (joint venture) company for the power project”, said T K Chand, chairman and managing director, Nalco.

The power purchase agreement (PPA) for the power project is expected to be firmed up by the end of this fiscal. Coal from the mines allocated to Nalco would be linked to the JV project at Gajmara. The aluminium smelter projects and the power project are expected to act as catalyst for industrial growth in the region creating avenues of tangible and intangible benefits for the people of the state and generate direct and indirect employment for engineers, supervisors, skilled, semi-skilled and un-skilled workers.

Nalco, meanwhile, is investing Rs 12,000 crore on the new greenfield smelter coming up at Kamakhyanagar, some 45 km from Gajamara, the site selected for the JV power project. The proposed smelter’s capacity is pegged at 0.6 million tonne per annum.

Nalco needs 1,400 acres of land for this smelter project. The state owned agency for land acquisition Odisha Industrial Infrastructure Development Corporation (Idco) has alienated 1,500 acres of land.

The smelter’s location is also advantageous as water would be easily available at Gajamara, said. The new smelter is expected to go on stream in nearly four years. This state-of-the-art smelter will make use of the latest in aluminium smelting technology.
 
Nalco is also going for brownfield expansion of its existing smelter project at Angul whose nameplate capacity is 0.46 mtpa. The navratna company has a Capex (capital expenditure) of Rs 10,000 crore to add 0.5 mtpa capacity to this smelter. Land and associated infrastructure needed for this smelter expansion is in place.

 
With the expansion, Nalco hopes to prune cost of production and achieve economy of scale. The company will also deploy the latest technology to ensure reduced energy consumption and high