Indal Proposes To Double Hirakud Smelter Capacity

Indian Aluminium, which fell short of its metal requirement by around 20,000 tonnes last year, is planning to double the capacity of its Hirakud smelter to 60,000 tonnes per annum.

The company is also actively considering doubling the generation capacity of its captive power plant at the smelter complex to 135 MW.

Senior sources in Indal said the company has already begun a feasibility study.

The cost of the proposed expansion will be between Rs 500-700 crore.

However, the expansion plans have still not been placed before the companys board.

The matter will be taken up for discussion only after completion of the study, company sources said.

 

The capacity at Hirakud was increased last year by 6,000 tonnes to 30,000 tonnes after shifting 144 smelting pots from the Belgaum smelter.

As the company has been alloted two new coal blocks in Orissa, it feels that the fuel supply problem for the captive power plant can also be averted.

Indal, in association with Norsk Hydro and the Tatas, is setting up a 1 million tonne export-oriented alumina plant, christened Utkal Alumina, in Orissa. Surplus power from the Hirakud captive power plant can also be supplied to Utkal Alumina.

The decision to increase the metal production capacity has been influenced by the fact that international prices of the base metal have begun to firm up from around $1,600 tonne per annum at present and are likely to increase over the next two years.

Indal, which has now turned into a producer of value-added downstream products from a primary producer, hopes to cash in on the impending boom.

Hence, its demand for primary aluminium is likely to rise over the next few years.

The Indian associate of Canadian major Alcan also has huge unutilised smelting capacity. This has primarily been due to an acute power shortage at its Alupuram and Belgaum smelters.

The capacity utilisation in Belgaum had fallen to around 5,000 tonnes per annum against an installed capacity of 73,000 tonnes.

The crisis at the Alupuram smelter in Kerala was so acute that it had to be closed down temporarily in April last year.

The company has now decided to install a 100 megawatt captive power plant at Belgaum.

The plant will be set up on a build-own-operate-transfer basis by Coastal Power of USA and which is likely to be completed by end-1998.

To meet its increasing demand for the base metal, the company over the last year has entered into a tolling agreement with its arch-rival Hindalco Industries, the A V Birla group company.

Hindalco sources say that Indal will be lifting around 10,000 tonnes in 1996-97.