 "Rio Tinto to make India comeback via green aluminium project with AM Green")
Nearly ten years after exiting India, global mining giant Rio Tinto is preparing for a re-entry through a proposed partnership with AM Green, a firm promoted by the founders of Greenko Group,
The proposed collaboration involves establishing an aluminium smelter with a capacity of 1 million tonnes per annum (mtpa), coupled with 2 mtpa of alumina production. The facility will be powered entirely by renewable energy sources. As an initial step, both entities are expected to sign a memorandum of understanding (MoU) to conduct a feasibility assessment, with an official announcement expected later this week.
India’s aluminium sector is currently dominated by players such as Hindalco (part of the Aditya Birla Group), Vedanta, and the public-sector National Aluminium Company (NALCO).
Greenfield facility likely by 2030
The first phase of the greenfield project is likely to be commissioned by 2030. Under the agreement, it will aim to produce 500,000 tonnes of primary aluminium annually and is planned to be located near a port in South India for logistical advantage. ALSO READ: Evaluating impact of US duties on steel, aluminium: Jitin Prasada in RS
To ensure a sustainable production process, the plant will use 1.8 to 2.0 GW of solar and wind power, supported by round-the-clock pumped hydro storage. This would require a total renewable capacity of approximately 7 to 8 GW.
Mahesh Kolli, group president of AMG Metals & Materials and Greenko, said: "Over the last few years, we have been able to deliver a multitude of decarbonisation solutions comprising electricity, molecules, chemicals and fuels. We gear up to expand that further to the materials space. This MoU could deliver much needed low-carbon metal at scale to propel decarbonisation initiatives in global supply chains across auto, construction, consumer packaging and many more segments." Jérôme Pécresse, Rio Tinto aluminium Chief Executive, said, "This study is an important step in our ambition to grow our global, low-carbon aluminium footprint while exploring new project delivery approaches and opportunities in emerging markets. Partnering with AMG Metals & Materials enables us to assess how we can develop low-cost responsible aluminium production powered by renewable energy."
Growing demand of aluminium
Aluminium, known for being lightweight, ductile, and fully recyclable, has seen growing demand across sectors such as automotive, construction, power, packaging, and transportation. According to the joint statement, global demand for aluminium is estimated at around 70 million tonnes annually. Analysts project that building a facility of this scale would require a phased capital investment of $5–7 billion, with power being the most significant cost component.
Although coal has traditionally powered aluminium smelters, the industry is increasingly shifting towards cleaner energy sources. For instance, Vedanta Aluminium — India’s largest producer — is working to boost its renewable energy share from 5 per cent in 2024 to 30 per cent by 2030.
India’s aluminium and bauxite landscape
India ranks as the world’s second-largest aluminium producer, with a production capacity exceeding 4 mtpa. The country also recorded bauxite production of 23.93 million tonnes in FY24, according to the Ministry of Mines. Despite possessing abundant bauxite reserves, India continues to import large quantities of the ore.
For this venture, Rio Tinto plans to source bauxite from its Australian mines to feed the smelter and refinery operations.
Why did Rio Tinto exit India?
Rio Tinto exited India nearly ten years ago primarily due to prolonged environmental opposition and lack of sufficient state support, which rendered its Bunder diamond mining project in Madhya Pradesh commercially unviable. Despite investing heavily — around ₹1,200 crore by 2016 — and having plans to produce 27.4 million carats of rough diamonds, the company faced significant hurdles, including environmental concerns related to the mine's proximity to a tiger wildlife corridor and the potential cutting of 500,000 trees.
These challenges, coupled with delays in obtaining necessary environmental clearances and local protests, prevented Rio Tinto from moving beyond the prospecting license stage. Additionally, the global slump in the diamond market further contributed to economic uncertainties, influencing the decision to withdraw. Consequently, Rio Tinto formally handed over the project to the Madhya Pradesh government in 2016, marking a graceful but non-commercial exit from India. (With agency inputs)