Uncertainty looms over Anrak Aluminium's INR 7,000 cr alumina refinery

A big question mark hangs over the future of Anrak Aluminium's Rachapalli alumina refinery located in Makavarapalem Mandal, about 90-km from Vishkhakhapatnam. With the Andhra Pradesh Government announcing the cancellation of the bauxite supply agreement that it had with Anrak Aluminium Limited, the alumina refinery built at a cost of nearly INR 7,000 crore now awaits possible closure. It is learnt from industry sources, however, that the company is mulling signing fresh agreement for bauxite supply with the State Government and clearing issues with local tribal people and opposition parties in order to avoid any such consequences.

Anrak Aluminium Limited was promised the raw material by the Andhra Pradesh Mineral Development Corporation from Jerrela and Sapparla blocks in the Agency. It has already kept three lakh tonne bauxite ore, sourcing it from Gujarat Mineral Development Corporation. A joint venture of Penna Group and Ras Al-Khaimah with a shareholding of 87:13 per cent, AAL had also contemplated a total investment of INR 14,000 crore on the refinery, captive power plant, and smelter.

“Now, the company is keeping some of the facilities under operation by using steam and hot water. We are not able to undertake refining as once we commence it we have to ensure uninterrupted supply of raw material,” an official of AAL pointed out.

Post announcement made by Andhra Pradesh Chief Minister N. Chandrababu Naidu that GO 222 remains scrapped, many companies have withdrawn their plans to invest in the state. Kota in Vizianagaram district, has almost given up its investment plan due to uncertainties plaguing bauxite mining in the Eastern Ghats.