Bauxite blocks auction to be more competitive following Adani Group's entry into the aluminium sector

As Adani Group charts an entry into the alumina refining sector and existing players seek to expand capacity, the following auction for bauxite blocks in Odisha may see strong interest.

Hemant Sharma, the Principal Secretary of the Odisha Industries Department, said three bauxite blocks had been scheduled for auctions this year.

Adani Group will be establishing a 4-MTPA alumina refinery and may enter aluminium production; hence it is anticipated to bid for mines. However, raw material linkages will be available to Odisha Mining Corporation (OMC). Raw material security may be necessary due to the scale of the proposed project.

Jayanta Roy, the Senior Vice-President at ICRA, said, "Securing bauxite supply will be a key success factor for the alumina project since almost 3 tonnes of bauxite are needed for every tonne of alumina. A majority of good quality bauxite is available in Odisha."

ICRA Limited (formerly Investment Information and Credit Rating Agency of India Limited) was set up in 1991 by leading financial/investment institutions, commercial banks and financial services companies as an independent and professional investment Information and Credit Rating Agency.

As Vedanta ramps its alumina production, it is expected to bid for bauxite mines at auction. Sunil Duggal, the CEO of Vedanta, stated, "The Company was expanding its Lanjigarh alumina plant's capacity to 5 mt over the next few years."

Satish Pai, the Managing Director of Hindalco Industries, said, "The upstream capacity would likely remain unchanged at 1.3 mt, and the downstream output of the company would increase from 400,000 tonnes to 700,000 tonnes in the next five years."