Nalco to bid for bauxite blocks and start merchant mining of the raw material

The state-run National Aluminium Company Limited has reportedly decided to bid at the auctions of 21 bauxite blocks to be put up for allocation by the governments of Jharkhand, Chhattisgarh, and Madhya Pradesh. According to the report, Nalco will put in bids for captive consumption and start merchant mining of the raw material.

Per the Nalco’s statement, the company eyes to step into commercial merchant mining as part of its diversification plans and thus, wish to leverage its expertise in the captive mining of bauxite in eastern state of Odisha.

Company officials said: “Some of the prime bauxite reserves would be developed for its own consumption, while production from other blocks would be up for free sale for other aluminium refiners in the country.”

The foray into domestic merchant mining would be the precursor to Nalco’s entry into mining of bauxite overseas, starting with an exploration of opportunities in New Guinea.

Nalco had proposed to send a delegation of officials to speak to the government of New Guinea about the allocation of bauxite reserves, but it was possible as the Indian aluminium producer put an offer on the table to set up an alumina refinery in New Guinea, officials said.

They also pointed out that if plans in New Guinea fructified, it would provide a base to Nalco to enter into mining operations in Australia.

As per the report, Nalco’s entry into mining in Australia would be through its newly floated joint venture with Hindustan Copper Limited and Mineral Exploration Corporation of India Limited and Khanji Videsh India.

Nalco’s overseas new investment plans came in the wake of the company’s plans to invest in Iran for setting up 500,000 tonnes per year capacity of an aluminium smelter. But since the latter looks unlikely to materialise any time in the near future because of the US sanctions against the Western Asian nation, the Indian government has asked Nalco to put its Iranian plans on ice and instead make strategic investment plans in other geographies to meet the rising domestic demand for aluminium.

According to a Nalco forecast, Indian aluminium demand is expected to touch 7.2 million tonnes a year over the next five years from 3.6 million tonnes a year at present.