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It’s been great going for India’s state-owned National Aluminium Company (NALCO). Its revenues in sale of alumina are up by 30% year-over-year and it has reported a 94% jump in net profit.

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The company has now lined up some new projects.

According to reports, NALCO is said to be contemplating a high-end aluminum products plant by availing technology from foreign suppliers. The project is intended to provide for future applications of aluminum in bullet trains, aerospace and electric vehicles, all three of which are coming to India.

T.K. Chand, NALCO’s chairman and managing director, was quoted as saying that the technology for high end aluminum products plants was not available in India, so Nalco was in talks with potential suppliers in the U.S. and Russia to avail their technologies. The company had already floated an Expression of Interest (EoI) to select the technology supplier.

If successful, the proposed plant is likely to come up within the aluminum park at Angul in Odisha province.

Earlier this month, the aluminum major inaugurated three major projects at a total cost of about U.S. $94 million (Rs 660 crore). One was a bauxite mine, the second a 18.5 MW power unit at alumina refinery, Damanjodi and a nanotechnology-based defluoridation plant at Angul.

The aluminum park that Chand referred to was being developed jointly by NALCO and state-owned Odisha Industrial Infrastructure Development Corporation.

NALCO has signed a memorandum of understanding (MOU) with the Indian Defense Ministry Public Sector Unit Mishra Dhatu Nigam Ltd for the manufacture of high-end aluminum alloys.

Aluminum is not only in the weapons and aerospace sector but also in vehicles (especially electric vehicles).

In an interview with The Economic Times recently, Nalco’s CMD spoke of his plans to make the company a  1-million-ton aluminum player by 2020. He said NALCO’s capacity today was at 4.6 lakh ton, of which, this year, it would be producing around 4.2 lakh (420,000) tons. In 2018-2019, the company planned to ramp up production to 4.6 lakh (460,000) tons. The addition of a new smelter would take it to over 1 million tons for aluminum.

When asked for the reason behind NALCO’s alumina sales volume jumping by 30% year on year, Chand replied that the increase in revenue, particularly in alumina, came because of change in NALCO’s strategy. Earlier, the company would sign a long-term agreement for sale of alumina in the international markets, but it did not give much benefit in case of a rising market. Thereafter, with the market price going up, it had switched strategy of spot tenders. This was what led to the prices increasing from U.S. $280 to as high as $527.

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Growth in volume was also achieved since NALCO was able to achieve a 100% capacity utilization of aluminum refinery.

It’s, of course, no secret that India’s Eastern Ghats have some of the world’s finest bauxite reserves, a crucial raw material in the making of aluminum.

FREE Download: The Monthly MMI® Report – covering the Aluminum market.

Experts have been of the opinion that once mining was allowed in full swing, the Indian aluminum industry could attract multibillion dollar investments, opening up not only employment opportunities for thousands but contributing about $25 billion to the Indian exchequer in about 15 years.

Vedanta Resources‘ CEO Tom Albanese was of the view that negative propaganda about bauxite mining was an offshoot of a “vilification campaign,” saying there was a need to counter it by creating awareness of availability of proven environment-friendly practices.

At a recent international seminar organized by the International Bauxite, Alumina and Aluminium Society (IBAAS) in India, Albanese was joined in his pitch by the president of Anrak Aluminium Ltd., Hariharan Mahadevan, who felt there was “misplaced commotion” over red mud and “so-called” ecological issues that had become obstacles in the way of the aluminum projects in the Eastern Ghats region of India. Long-term planning to ensure sustainable safeguards and precautions was the way to go, he added.

Anrak Aluminium is a joint venture between Ras Al Khaimah Investment Authority (of the UAE) and Penna Cements, and had constructed a 1.5 metric ton alumina refinery through an agreement with the Andhra Pradesh Mineral Development Corporation (APMDC) that it would supply bauxite from its 225-metric ton Jerrala deposit. But APMDC was unable to keep its commitment, as the Indian government later froze all earlier clearances for bauxite mining development. With a new government in place, the company has expressed hope of securing permissions to mine bauxite in the next few months.

In approximately one year’s time, the Indian aluminum sector’s capacity will touch 4.36 metric tons. But much of it will hold no meaning because of the lack of raw material security. The opening of new mines has been stalled for various reasons – protests by local citizens and non-governmental organizations, even violence by a break-away faction of the Maoist communists.

Vedanta’s alumina refinery in Odisha at Lanjigarh has been caught up in this, and the company had to procure 3 metric tons of bauxite from different parts of the country, as well as from Guinea, to meet its needs.

But after the third time, Chief Minister of Andhra Pradesh Chandrababu Naidu has now indicated that he would take up the challenge of opening bauxite mines in his Province, despite stiff opposition. For his previous work as CM, Naidu was applauded by world leaders, including Bill Clinton and Tony Blair.

A report in The Business Standard said if anybody could get bauxite mining going, it was Naidu. Of India’s bauxite resources of 3.48 billion tons, Andhra Pradesh accounts for 18%. No wonder aluminum majors now have their hopes pinned on Naidu.

The author, Sohrab Darabshaw, contributes an Indian perspective on industrial metals markets to MetalMiner.

While Indonesia has banned the export of unprocessed ore, China, its largest consumer, continues to stockpile aluminum ingredient bauxite. In neighboring India, though, producers are still trying to explore the means of increasing bauxite mining, and turning two of the country’s provinces, rich in high-grade bauxite, into the world’s “most preferred” destination for investments in the aluminum industry.

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A few days ago, at an international seminar organized by the International Bauxite, Alumina and Aluminium Society (IBAAS) in India, speakers talked of clearing hurdles that were in the way of bauxite mining in India’s Eastern Ghats, propelling the two provinces in the region, Andhra Pradesh and Odisha, into the world’s most sought-after bauxite destinations.

As much as 52% of the resources are found in Odisha, where the country’s 3 aluminum groups – Hindalco, Vedanta and National Aluminium Company (NALCO) – have their plants. Together, with Andhra Pradesh, these 2 major bauxite-owning states are facing opposition from many of the stakeholders involved in the opening of new, larger mines.

Vedanta Resources Chief Executive Tom Albanese, for example, in his keynote address, said raw material security was the main point of concern for investors in India’s aluminum sector. Albanese pointed out that China (when it comes to India these days, almost everyone brings up its red neighbor) had been able to get over poverty by making huge investments in aluminum production.

He said even a small country like Guinea had improved its economy by exporting bauxite ore, so why not India? According to this report in the Hindu Business Line, it’s no secret that India’s Eastern Ghats have some of the world’s finest bauxite reserves. Experts have been of the opinion that once mining was allowed in full swing, the Indian aluminum industry could attract multibillion dollar investments, opening up not only employment opportunities for thousands, but contributing about $25 billion to the Indian exchequer in about 15 years.

The author, Sohrab Darabshaw, contributes an Indian perspective on industrial metals markets to MetalMiner.

India’s National Aluminum Company Limited (Nalco) and the country’s third-largest producer of aluminum, may soon be getting access to a new 65-million-ton bauxite reserve to expand its alumina refinery from 2.1 million tons a year to 3.1 million tons a year by 2016.

A draft of a detailed project report (DPR) for the expansion of the alumina refinery had been prepared and placed before the company board for final consideration. The expansion is part of Nalco’s overall growth plan by 2020.

Alumina is the intermediate product of aluminum and is produced from bauxite.

So what would the new augmentation plan mean in monetary terms for Nalco?

FREE Download: The latest Monthly MMI® Report – covering the Aluminum market!

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Last week, the Indian government finally decided to disinvest up to 10 percent of its shares in one of its prized companies – National Aluminum Co. Ltd (NALCO) – an issue that was hanging fire for a while.

The Empowered Group of Ministers headed by Finance Minister P. Chidambaram had fixed the floor price at US $0.74 (Rs 40) per share in NALCO through auction in two stages.

NALCO is India’s third-largest producer of aluminum, operates an alumina refinery, smelter and bauxite mines in the mineral-rich eastern state of Odisha.

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Continued from Part One.

Not only steel manufacturers, but even aluminium producers in India are now vying for a larger piece of the auto market pie, what with vehicles getting increasingly lighter and stricter pollution norms.

Hindalco Industries Ltd, the world’s biggest supplier of aluminum to carmakers, may double group sales to US $33 billion in five years as Audi AG (NSU) and other European carmakers swap steel with the lightweight metal.

Speaking to Bloomberg recently, Debnarayan Bhattacharya, managing director of Nalco, had said automobiles were a huge prospective business for his company. The European auto market was also booming, presenting a good market, he said.

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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.)

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Despite a decline in profits for the first quarter reported by India’s state-run National Aluminum Company Ltd (Nalco), aluminum producers here remain optimistic about the sector. Most of this sentiment is based on the likely positive demand from the automobile and power sectors which are expected to see an increase in the last months of 2012, also dubbed as the “festive season” in India, when purchases generally register a hike.

India produces around 1.6 million tons of aluminum annually, of which about 1.3 million tons are used by domestic buyers. While its domestic demand is poised to grow by about 8 percent a year, this year’s export figures, too, are also expected to see a rise.

Nalco, India’s third-largest producer of aluminum, reported a 41 percent decline in net profit in the first quarter of 2012-13 having ended in June, against the same quarter of the previous fiscal year. The aluminum major registered a net profit of US $41 million as against $69 million in the same period last year.

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As we mentioned in Part One, there is a time lag between the milestones set up for the park at the planning stage and the ground realities. One of the reasons for this is that same old perennial problem that plagues almost all major projects in India – land.

Delays in land acquisition have become a stumbling block. Odisha is also the state where India’s largest steel project by the Korean firm Posco has not gone past the planning stage, despite six years having gone by, because of land acquisition controversies.

Last month, the Hindu Business Line reported that the delay in land acquisition for the Angul park and its infrastructure development has put prospective investments in jeopardy.

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A Bahrain-based company, Midal Cables, announced its move to set up an aluminum conductor-and-rod manufacturing unit in the Indian state of Odisha. The total project will bring in about US $53 million in investment.

The more important part of that story is the location of this new unit. Midal is keen on setting up this facility at the aluminum downstream and ancillary products park at Angul in Odisha.

Angul is one of the few aluminum parks in India. It has been developed jointly by the state government’s nodal land acquisition agency — Industrial Infrastructure Development Corporation of Odisha (IDCO) and the Public Sector Unit (PSU) National Aluminum Company (Nalco).

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