Nalco mulls a second caustic soda plant to rein in rising aluminium smelting cost

India’s Navaratna public sector enterprise National Aluminium Company Limited (Nalco) is considering plans to open a second caustic soda plant in Odisha’s major seaport town of Paradip. The plant thought to supplement Nalco’s upcoming facility in Dahej- a JV between Gujarat Alkalis & Chemicals Ltd., will help check the spiralling overhead costs of its aluminium smelting operations.

While explaining the reasons behind considering a second caustic soda plants, Nalco Chairman and Managing Director Dr. Tapan Kumar Chand marked the following pointers:

1. Bringing operational costs under control is a priority in order to face global competition. Chinese producers get coal at highly subsidized rates which place them in an advantageous position against Indian aluminium producers in the international market.
2. China has shuttered down many aluminium raw material producing facilities in its fight against smog. This is likely to give rise to a long-term scarcity of the materials which need to be addressed strategically.
3. India’s aluminium production volume has jumped from 2.4 million tonnes two years ago to 3.7 million tonnes in FY 2016-17. The fight for limited raw materials is getting fierce among the three major aluminium producers. So, it is important to secure long-term supply of the critical raw materials such as caustic soda.

Note: Caustic soda (sodium hydroxide) and lime (calcium oxide) is blended in a hot solution used for the separation of alumina from bauxite, the primary ore of aluminium.

Besides, Nalco also wants to append its brownfield expansion project in Angul smelter with an additional capacity of 0.6 million tonnes at a total cost of INR 12,000 crore. The caustic soda plant on completion will help rein in the overall production cost.

In another development, the aluminium major today dedicated three projects worth INR 659.69 crore to the nation, as part of its 38th Foundation Day celebrations. The projects include bauxite mining activity launch at south block of Panchpatamali mines (INR 600 crore) in Koraput district, 18.5-MW turbo generator (INR 43 crore) at alumina refinery, Damanjodi and nano technology-based defluoridation plant (INR 16.69 crore) at smelter, Angul.

In the medium term, Nalco also has plans to tap into new coal blocks, which it anticipates will help pare down almost US$8 per metric ton on overhead.