India's Nalco Expanding, But Aluminum Production Cutbacks Still Elusive

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Continued from Part One.

President of Vedanta Aluminum Ltd, India’s numero uno aluminum producer, Mukesh Kumar, told Reuters that due to the closure of some of the aluminum smelters in the US, the demand had improved marginally.

Vedanta Aluminum is part of the billionaire Anil Agarwal-controlled Vedanta Group, and produces about 40 percent of the South Asian nation’s total output.

Indian aluminum exports to South Korea, Japan and China were currently priced at a premium of $223-$230 per ton above the London Metal Exchange (LME) benchmark, lower than the $240-$260 premium from other countries, the news report said. Low costs and availability of better grades of inputs, such as bauxite, give Indian smelters an edge over other suppliers.

On the other hand, declining aluminum prices around the globe, according to the report, had forced major players such as Alcoa and Norsk Hydro to cut output (just not nearly enough, or in some cases, not at all.)

Nalco’s aggressive expansion plans include projects around power supply in the western Indian state of Gujarat.

According to a report in the Deccan Herald, the Odisha-based Nalco had lined up two multi-million dollar projects in that state. While an aluminum refinery project was expected to get the go-ahead from the government soon, work was currently on to construct two units (each capable of producing 700 MW) of the proposed nuclear power plant.

The latter project, to be completed in collaboration with Nuclear Power Corporation of India (NPCI), is scheduled to be commissioned by December 2015.

One of the reasons, according to Nalco Chairman-cum-Managing Director B.L. Bagra, who was quoted in this report, to select Gujarat for its two important projects was the availability of land.  Nalco has had its fair burden of delays arising out of land acquisitions in other states, including the State of Odisha where has many of its major projects — among them two mega steel plants.

Bagra also said the PSU had decided to set up the refinery project after the Gujarat Mineral Development Corporation (GMDC) had said it would supply the raw materials for 25 years from the bauxite mines in Gujarat’s Kutch region.

Sohrab Darabshaw contributes an Indian perspective to MetalMiner.

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