Based on the prediction and assimilation of raw material reports the Anil Agarwal-owned Vedanta Ltd is all set to overtake Aditya Birla group as the largest producer of aluminium in the country. Vedanta have produced 0.96 million tonne of aluminium in its two facilities in Odisha and Chhattisgarh. If the numbers of production holds their output this year will be 1.6 million tonne, a 0.28 million tonne more than the combined production of Aditya Aluminium and Hindalco, subsidiaries of Birla group.
The other major producer of aluminium, the public sector National Aluminium Company (Nalco) is at the third place with a capacity of 0.42 million tonne this year.
The major boost to the aluminium output by Vedanta Ltd came from its Jharsuguda facility in Odisha, due to its recent expansions. It is expected to produce 1.1 million tonne and Balco plant in Chhattisgarh 0.56 million tonne this year. Jharsuguda unit had produced 0.76 million tonne aluminium last fiscal.
Four new lines of production are being readied at the Jharsuguda facility of which two and half lines are already completed. The rest work will be completed by December increasing the plant’s capacity to 1.4 million tonne by March 2018.
The company had built two smelters at Jharsuguda with an investment of Rs 25,000 core and combined capacity of 1.75 million tonne, representing the largest single location aluminium facility in the world.
Though its smaller smelter of 0.5 million tonne was running for some time, the larger one with 1.25 million tonne capacity and SEZ status had remained idle. This was due to a dispute with the electricity authorities over the consumption of power from the company’s captive power plant (CPP), raw material (alumina) supply constraints and an overall market glut.
The resolution of dispute with the state government over access to CPP power and strengthening of LME (London Metal Exchange) prices for aluminium has aided the company to unleash the idle capacity and scale up production.
With the company’s Lanjigarh alumina factory languishing from raw material crunch following denial of bauxite mining on Niyamgiri hills by the Central government, that unit is compelled it to run on low capacity on imported bauxite. As a result, the Jharsuguda smelter is unable to source sufficient alumina, the feedstock for aluminium, in house.
The company is importing 60 to 65 per cent of its alumina requirement from different countries, said Abhijit Pati, CEO (Aluminium and Power Division), Vedanta Ltd. With the LME metal prices remaining robust, scaling up aluminium production based on imported alumina will be viable. He said that LME aluminium prices have been hovering over 2000 dollar per tonne for last six months and are expected to remain in the range of 2000 to 2200 dollar range for at least next two years. Aluminium demand in India is growing at a rate of 7.5% faster than the world demand of 5%.
Even with the rigorous rise in demand, with the Balco unit going for capacity addition of 0.42 million tonne and Jharsuguda unit achieving rated capacity of 1.75 million tonne, Vedanta will account for more than half of the country’s aluminium production couple of years down the line.
Source: Business Standard