Nalco lines up Rs 11k cr for Indonesian project
National Aluminium Co (Nalco) has firmed up plans to invest Rs 11,000 crore in a mega greenfield smelter and thermal power project in Indonesia.
By Rakhi Mazumdar, TNN |
KOLKATA: National Aluminium Co (Nalco) has firmed up plans to invest Rs 11,000 crore in a mega greenfield smelter and thermal power project in Indonesia. It marks the first overseas venture for the country’s largest aluminium company.
As part of the plan, Nalco will set up a 5-lakh tonne aluminium smelter and 1,250 MW power plant in that country. Nalco’s board of directors approved the proposal in a meeting on December 19.
The deal was finalised after a meeting in Bhubaneswar last week between top Nalco executives and a team of officials from the provincial government of south Sumatra in Indonesia. The Indonesian team, headed by the deputy governor of the province, also visited Nalco facilities in Orissa.
“We would invest Rs 11,000 to set up a greenfield smelter and a thermal power plant. While Rs 4,000 crore will be spent on the smelter, the power plant would require an investment of Rs 7,000 crore,” Nalco director (finance) BL Bagra told ET from Bhubaneswar.
Nalco is likely to make the investment through a separate company, which will be incorporated in Indonesia. “We would like to join hands with a local player to undertake two projects. However, we will retain full management control and have a majority share in both ventures,” Mr Bagra added.
As part of the deal, the Indonesian government has agreed to give Nalco access to coal supplies in south Sumatra. “We would require 6 million tonne of coal per annum. We have been assured of 100% coal linkages for a period of 30 years,” Mr Bagra said.
It had earlier been advised by the mines ministry to look out for smelting capacity abroad to convert the excess alumina into aluminium metal. “Indonesia, with its good reserves of coal, meets the crucial requirement of providing access to cheap energy source,” a Nalco official pointed out.
Nalco had earlier been in talks with countries like Oman and the UAE, which have access to natural gas. However, talks did not materialise since none of these countries could provide assured linkages for natural gas.
As part of the plan, Nalco will set up a 5-lakh tonne aluminium smelter and 1,250 MW power plant in that country. Nalco’s board of directors approved the proposal in a meeting on December 19.
The deal was finalised after a meeting in Bhubaneswar last week between top Nalco executives and a team of officials from the provincial government of south Sumatra in Indonesia. The Indonesian team, headed by the deputy governor of the province, also visited Nalco facilities in Orissa.
“We would invest Rs 11,000 to set up a greenfield smelter and a thermal power plant. While Rs 4,000 crore will be spent on the smelter, the power plant would require an investment of Rs 7,000 crore,” Nalco director (finance) BL Bagra told ET from Bhubaneswar.
Nalco is likely to make the investment through a separate company, which will be incorporated in Indonesia. “We would like to join hands with a local player to undertake two projects. However, we will retain full management control and have a majority share in both ventures,” Mr Bagra added.
As part of the deal, the Indonesian government has agreed to give Nalco access to coal supplies in south Sumatra. “We would require 6 million tonne of coal per annum. We have been assured of 100% coal linkages for a period of 30 years,” Mr Bagra said.
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However, the mining will be carried out by a local company since Indonesian laws do not allow FDI in mining. A delegation of senior officials from Nalco will visit Indonesia in January to thrash out details of the venture including the price at which the coal will be supplied to Nalco. Nalco is investing Rs 5,100 crore in the second phase of its expansion programme. Post-expansion, the company is slated to have excess alumina capacity. It had earlier been advised by the mines ministry to look out for smelting capacity abroad to convert the excess alumina into aluminium metal. “Indonesia, with its good reserves of coal, meets the crucial requirement of providing access to cheap energy source,” a Nalco official pointed out.
Nalco had earlier been in talks with countries like Oman and the UAE, which have access to natural gas. However, talks did not materialise since none of these countries could provide assured linkages for natural gas.
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