Nalco eyes opportunity for bauxite assets in Guinea

Realising the fact that Guinea, being the world's largest bauxite reserves with an estimated 7.4 billion tonnes of high-grade bauxite, is a house of irresistible opportunities for aluminium smelters, National Alumininum Company (Nalco) is eyeing the possibility of gaining access to bauxite deposits in the West African country.

T.K. Chand, chairman and managing director of Nalco said, “If we get mining rights, we can think of setting up an alumina-refining facility there. Nalco will shortly send a team to Guinea to evaluate the possibilities.”

Guinea’s bauxite is considered to be the best in the world owing to containing a very low amount of reactive silica that removes the need for beneficiation or washing of ore. But, due to a lack of proper infrastructure, the country is unable to process ore in the right way. Sporadic political unrest also adds a cause to disrupted mining and its movement.

Nonetheless, Nalco can hope for good returns and profitability from alumina sales, if receives the mining rights. In fact, it is going to be the first Indian company to own a bauxite mine in Guinea because till date, no Indian aluminium company has a presence there.

The alumina business is Nalco's major profit-making vertical over the years now and enjoys good margins on exports with a constant growth in prices.

However, anticipating a downfall in exports in the next three to four years due to a rise in internal consumption, the company has adopted a new plan to manage vagaries in the metals business, which includes diversification into green energy, an independent power producer, merchant mining and setting up a soda plant.

Also, though shipments in African nation, which is currently hovering at 30 million tonnes of bauxite, is expected to double in a year due to sharp ramp-up in production, yet Nalco has decided to not focus only on bauxite but to hunt for strategic mineral acquisition from abroad. For this purpose, the company has also formed a joint venture with Mineral Exploration Corporation and Hindustan Copper named Khanij Bidesh India.