India’s Nalco to Tap New Bauxite Reserve, Boost Alumina Production

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 Aluminum's intermediate product, and is produced from bauxite.

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

Once they complete the expansion, it is estimated that Nalco could generate additional revenue of about US $340 million.

Nalco was in the news in May this year when the government of India decided to disinvest up to 10 percent of its shares in the company.

A report in the Business Standard, quoting an unnamed company official, said the bauxite reserves at Pottangi in the eastern state of Odisha, where the country’s largest integrated aluminum producer also had its operating units, would be sufficient to feed the expanded alumina refinery until 2036.

The expansion and mine development would require about US $800 million as investment. The Odisha state government had already accorded Nalco an in-principle approval for a mining lease. Nalco currently operates a 310-million-ton Panchpatmali bauxite reserve in Odisha, producing 4.8 million tons a year to feed its alumina refinery, and nearly half-million tons a year to feed its aluminum smelter.

Nalco’s other expansion projects include setting up a 1-million-ton alumina refinery in the western state of Gujarat, and a half-million-ton aluminum smelter and a 1,260-MW captive power plant in the Sundargarh district of Odisha.

Which is no surprise, because Nalco, besides having an alumina refinery, also has an aluminum smelter and is into power generation, rail and port operations.

by Sohrab Darabshaw