New GR on bauxite puts Rs 4400 cr alumina projects on fast-track

The recent resolution regarding bauxite mining in Gujarat, passed by the state's Industries and Mining Department on November 19, has put two major alumina refinery projects worth about Rs 4400 crore, on a fast track.

As per the resolution, all bauxite bearing areas-the basic raw material required for alumina unit, in the state have been kept reserved for Gujarat Mineral Development Corporation (GMDC) except for areas already granted for PL/ML.

GMDC has joint ventures with US based Alu Chem and Ashapura Minechem for setting up alumina projects in the state with a capacity of 1 million metric tonnes per annum (MMTPA) each. "GMDC will hold minority stake of 26 per cent equity in these projects. The new policy will give a booster to the projects and we aim to set them up in the next two years. Each project is estimated to cost Rs 2200 crore," said a GMDC official privy to the development.

While Ashapura will set up the project in Kutch, Alu Chem is exploring Jamnagar district for the 1 MMTPA project.

Gujarat has large bauxite deposits estimated about 104 Million Tonnes. About 90% of these deposits, occur in three Districts - Kutch, Jamnagar and Junagadh.

All surplus plant grade and non-plant grade bauxite generated from the existing leases in the state will be sold or exported through GMDC, according to the GR.

With this, the state run PSU aims to trade about 10 lakh tonnes of bauxite in the next one year, garnering close to Rs 60 crore of revenues on a conservative side, industry sources said.

Ashapura Minechem has been mulling to set up a alumina refinery in Gujarat for the last six to seven years however the project has not materialise due to several reasons. Alu Chem had earlier contested the Kutch alumina refinery project being awarded to Ashapura Minechem. The project was eventually awarded to Ashapura by the chief minister's office.

Ashapura then roped in Qingtongxia Aluminium group for a 50:50 joint venture at one point of time. The JV was eventually called off.

Last year, Ashapura was also in talks with Adani group for setting up a Rs 10,000 crore refinery project Kutch however deal did not materialise. Meanwhile, Ohio-based AluChem, a leading manufacturer of specialty alumina products in US, entered into a joint venture with GMDC in 2007 as per which the PSU will supply the raw material-bauxite for a new refinery project in Jamnagar.

The proposed plant will manufacture hydrated alumina, calcined alumina, thermally-reactive alumina, tabular alumina and activated alumina.