NALCO puts diversification and expansion plans on fast track

The National Aluminium Co Ltd (NALCO) expressed interest to diversify into nuclear power production. The company is also looking to strengthen its raw material supply chain.

It expects Odisha to give it green signal for a new bauxite mine in the next few months that will help it to start work on another 1 million tonne per annum alumina plant at a cost of about $867 million.

NALCO, which has the capacity to produce 2.28 million tonnes a year of alumina from naturally occurring bauxite, is also in talks with officials in Modi's home state of Gujarat to set up another 1 million tonne a year alumina refinery there.

Tapan Kumar Chand, the newly appointed chairman-cum-managing director of NALCO said, "You can't remain at the same place. If you don't grow, competitors will start growing and you will be squeezed out of the market."

Last month, the company announced plans to set up an aluminium smelter and an associated power plant in Iran worth as much as $2.6 billion.

Chand said he would prefer a local partner who could supply cheap power to run a 1 million tonne per annum smelter in Iran. NALCO would source alumina as raw material for the plant from its refinery in the eastern Indian state of Odisha.

Chand said multi-year-low prices for aluminium due to an oversupply would not be a deterrent to the plans. Any new plant would take 2-3 years to complete and by then demand could improve given the nature of such cyclical industries, he said.

He expects Prime Minister Narendra Modi's plans to expand power transmission networks, build new cities and extend the country's railway network to drive demand growth.