Nalco may include mining in its diversification plans

State-run National Aluminium Co is mulling over the idea of exploiting its core competence of mining to offset the fall in prices of aluminum.

Nalco's new chairman and managing director, TK Chand, who met Odisha Chief Minister Naveen Patnaik on Monday, is also hoping that the company can soon mine the 75mt Potangi bauxite deposit reserved for it since 2007.

Chand said he is hopeful that Nalco can beat the trend by pushing products with higher realisation and tapping newer markets, such as East Africa. In his earlier role as director, commercial, of Vizag-based public sector undertaking RINL, Chand had opened new markets such as Ethiopia, Kenya and Tanzania for RINL's steel products.

In 2014-15, Nalco more than doubled its net profit and announced a turnover of Rs 7,771 crore, its highest ever for a financial year. But the recent slide in prices of the metal on LME, and increasing imports have since forced it to seek the central government's intervention.

"Ferrous and non-ferrous metal market was down with 60% of companies making cash losses in the first quarter of the current financial," Chand said in his first press conference as Nalco's CMD.

With bauxite from Potangi, Nalco plans to set up a fifth stream at its Koraput refinery, adding one million tonne of alumina to its current annual capacity of 2.275 MT. Patnaik's government has drawn several CSR and investment commitments from Nalco but continues to delay signing the lease. In April this year, Prime Minister Narendra Modi had written to the state government saying Nalco should get "timely support".

Chand said he has asked his team to simultaneously renegotiate contracts with the aim of reducing 20% in procurement costs, saving Nalco Rs 80-100 crore. Chand also sees an opportunity in leveraging Nalco's mining expertise and plans to convince the board to include mining in its vision plan.