Vedanta is on track to become the largest aluminium maker in India by next financial year

Currently Aditya Birla Group remains the largest aluminium producer in India with a total combined capacity of 1.32 million tonne of aluminium by Aditya Aluminium and Hindalco. However, Vedanta is on the right track to touch 1.6 million tonne capacity mark this year surpassing Hindalco.

Vedanta has recently reported record half yearly production of 753,000 tonnes, up 39% YoY. This was attributed to continued smelter ramp-up in Balco and Jharsuguda. The company reports a current run-rate of 1.6 tpy (excluding trial run production). The company, which produced 1.21 million tonne of aluminium across its two facilities in Jharsuguda and Korba in FY2017, is on course to clock an annual output of 1.6 million tonne this year. 

"As a group, we will be producing 1.6 million tonne of aluminium in FY18 which is 66 per cent higher than the last year's output” says Abhijit Pati, CEO (Aluminium and Power Division), Vedanta Ltd.

The Jharsuguda facility in Odisha is under major expansion mode. The Jharsuguda smelter is expected to produce 1.1 million tonne and Korba plant 0.56 million tonne this year. The two Jharsuguda units produced 0.78 million tonne aluminium in FY2017 and Korba plant produced 0.43 million tonne.

"Four new lines of production are being readied at the Jharsuguda facility out of which work on two and half lines are already over. The rest work will be completed by this year. So the exit capacity at Jharsuguda in March, 2018 is expected to be 1.4 million tonne", he added.

On the other hand, Aditya Birla Group’s subsidiary Aditya Aluminium and Hindalco put up a combined production of 1.3 million tonne aluminium in FY17. Nalco, the other state run aluminium producer reported a total production of 0.38 million tonnes in FY2017 and with an annual capacity of 0.42 million tonne.

Vedanta has recently announced that the State Pollution Control Board, Odisha ('SPCB') has revoked the closure order on the remaining two power units, which were closed along with two more following a breach in the Ash Pond dyke wall at Jharsuguda, on November 10, 2017. SPCB had directed a temporary closure of the five power plant units, which has now been revoked and all five power units are now functioning. 

The resolution of power dispute and strong LME aluminium price has helped the company restart its idled capacity and scale up production. Odisha State has also referred Vedanta’s plan to ramp up alumina production from 1 million tonnes to 6 million tonnes at Lanjigarh to high-level clearance authority (HLCA).  The company has sought 1,645.8 acres of land for the expansion of alumina refinery at Lanjigarh in Odisha.   Lanjigarh alumina refinery is facing raw material crunch following denial of bauxite mining on Niyamgiri hills.  The issue is likely to lessen with the state government entering into a deal with state-owned Odisha Mining Corporation on using the Kodingamali bauxite mines with 81 million tonnes of bauxite deposit.

Pati expects LME aluminium prices to remain in the range of USD 2000-2200/t range for at least next two years.  He also added that aluminium demand in the country is growing at a rate of 7.5 per cent outpacing the world demand growth of 5 per cent.  With the current strategy, he expects Vedanta to account for more than half of the country's aluminium production in a few years.