Nalco yet to make headway on Orissa expansion

Awaits allotment of land and water from the Orissa government.

State-owned National Aluminium Company Limited (Nalco) is still awaiting allotment of land and water by the Orissa government for its proposed 0.5-million tonne aluminium smelter plant involving an estimated investment of Rs 16,000 crore.

“Unless we get the allotment of land and water, we cannot apply for a coal block for captive power generation. We need these basic things in place to start work on the project though we had already got the feasibility study done for the same,” BL Bagra, chairman and managing director of Nalco, said.

Apart from the smelter plant, the company has proposed to add 1-million tonne capacity in alumina production with an investment of Rs 6,000 crore.

It has cash balance of Rs 5,000 crore with a larger capacity to raise debt to fund the projects. If necessary, the company would approach the markets with capital raising plans only after 4-5 years, he said.

The company is also awaiting clearances for extracting Pottangi bauxite reserves in Orissa, already allocated to Nalco, to be able to scale up its total alumina capacity to 3.1 million tonne from the present 2.1 million tonne.

While the issues related to mining have been sorted out in states like Jharkhand and Chhattisgarh, they are yet to be addressed in the case of Orissa and Andhra Pradesh, Bagra said.

Nalco had got a mining lease for bauxite reserves in AP in 2009. However, forest clearances and other issues are coming in the way of taking up mining development and subsequent smelter plant proposed in the state, he said. Nalco is also executing a 5-Mw windmill project in Kadapa district.

According to Bagra, one-third of the total global aluminium industry is now left with no margins after the prices fell starting June this year. However, Indian companies are still doing better though margins are under pressure. “International aluminium prices have been recovering in the last couple of days. If the trend continues, our margins will stay at the desired levels,” he said.