
India's state-owned aluminium producer National Aluminium Company (Nalco), in all likelihood, is planning to hold back its greenfield aluminium smelter plan in Iran. The Navaratna PSU had planned to come up with a 0.5 million tonne per annum (mtpa) aluminium smelting facility in the West Asian country to cash in on the easy availability of cheaper natural gas there, but the current market conditions do not seem to favour the project.
"Currently, the market conditions do not favour us to set up an aluminium smelter in Iran. A new overseas smelter needs substantial investment and we would evaluate all factors before going ahead with the plan. Nalco has domestic commitments as of now and we are going for a ramp-up of our existing smelting unit at Angul (Odisha)," said a senior executive from Nalco. 
The aluminium major had signed a memorandum of understanding (MoU) with Iranian Mines and Mining Industries Development Renovation Organisation in May this year, to set up an aluminium smelter in Iran. The plant was supposed to come up at the Chabahar free trade zone at a total estimated cost of US$2 billion.
Nalco's decision to keep in abeyance its proposed plan to build the smelter-cum-gas-based power plant in Iran visibly arises from the Union mines ministry's direction to it to this effect. Lately, Mines minister Piyush Goyal asked Nalco to rethink its plan for any overseas smelter now and focus more on value addition back home instead. The ministry has categorically asked Nalco to strategize a roadmap for expanding its aluminium production capacity from the current 0.46 mtpa to 2mtpa. Nalco had set a target to attain its full capacity of 0.46 mtpa in the next financial year.
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However, Nalco has kept its options open to go for a toll-smelting arrangement with some Iranian companies. Under this proposal, the company will divert a portion of its surplus exportable alumina to the Iranian smelters for use in aluminium smelting.
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