Utkal Alumina seeks green nod to double refinery capacity to three mtpa

Utkal Alumina International Ltd, a 100 per cent subsidiary of Aditya Birla Group owned Hindalco Industries, has sought environment clearance to double capacity of its alumina refinery in Odisha from 1.5 million tonnes per annum (mtpa) now to three mtpa.

The expansion estimated to cost Rs 4000-5000 crore, would be effected in phases. Initially, the alumina refinery near Kashipur in Rayagada district would be de-bottlenecked to reach a capacity of two mtpa. Investment in the first phase is pegged at Rs 1000 crore.

The expert appraisal committee (EAC) of the Ministry of Environment, Forests & Climate Change would take up Utkal Alumina's application for expansion at its next meeting for industrial projects scheduled on February 5.

The Utkal refinery is fed by the company's captive Baphlimali bauxite mines with enough reserves to cater to the refinery's requirement for 25 years after its ramp-up. The mine contains very low amount of silica which provides cushion against rising caustic soda prices.

Hindalco's Aditya smelter is fed by alumina primarily sourced from Utkal Alumina Ltd, a 100 per cent subsidiary of Hindalco Industries Ltd. Group company Aditya Aluminium owns an aluminium smelter of 0.36 million tonnes per annum capacity supported by 900 Mw CPP (Captive Power Plant) at Lapanga in Sambalpur district. It also has an FRP (Flat Rolled Products) facility for rolled products, extrusion products and wire rods.

Utkal's year-on-year EBITDA (earnings before interest, taxes, depreciation and amortisation) grew by 18 per cent in the September quarter of FY18 to Rs 201 crore compared to Rs 170 crore in the comparable period of previous fiscal. Though the higher realization was positive for Utkal alumina, it results in higher input costs for the standalone aluminium business.