Nalco secures new bauxite mine for brownfield expansion

Nalco would be securing access to a new 65-million ton bauxite reserve to expand its alumina refinery from 2.1 million tons a year to 3.1 million tons a year, by 2016.

According to a company official, the bauxite reserves at Pottangi, in the East Indian province of Orissa where the country’s largest integrated aluminium producer also has its operating units, would be sufficient to feed the expanded alumina refinery until 2036.

The refinery expansion and mine development would require an investment of around $800 million and Nalco was currently examining a detailed project report before the company board takes a final call on the project, the official said.

The provincial government of Orissa has already accorded an in-principle approval for mining lease in favour of Nalco.

The aluminium producer currently operates a 310-million tonne Panchpatmali bauxite reserve in Orissa producing 4.8 million ton a year to feed its alumina refinery and 0.46-million tonne a year aluminium smelter.

The brownfield expansion in Orissa would be in addition to Nalco’s stuttering plans to invest $2 billion to construct a Greenfield alumina and smelter plant in western Indian province of Gujarat in a joint venture with Gujarat Mineral Development Corporation Limited (GMDC).

The project entailed a one-million tonne alumina and 0.5 million ton aluminium smelter fed by bauxite to be supplied by GMDC from latter’s mines in the Kutch region.

However, the project has hit a roadblock with Nalco insisting on its partner GMDC arrange for supply of cheap power to the smelters. Without assurance of cheap power, Nalco preferred to invest in downstream aluminium value added projects while GMDC was standing firm on upstream facilities including alumina refinery and smelter.