Reliance explores aluminium entry as Adani lines up $11.5 billion bet: Report

Mukesh Ambani-led Reliance Industries Ltd (RIL) is evaluating a potential entry into aluminium production, a move that could connect its planned coal gasification operations with metals manufacturing, Mint and UNI reported.

People familiar with the matter told Mint that RIL is exploring a plan to enter aluminium production as part of its broader evaluation of the metals business. The company’s plans remain at an early stage and have not been finalised.

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RIL has also purchased tender documents for Odisha’s Karlapat bauxite block, according to market sources cited by UNI. The block, spread across about 3,100 hectares, is estimated to contain more than 200 million tonnes of bauxite.

Reliance and the Adani Group were among the companies reported to have shown interest in the block earlier. However, Vedanta Aluminium subsidiary BALCO emerged as the preferred bidder after offering an auction premium of 175%.

The development comes as RIL prepares to develop a coal gasification project in Andhra Pradesh. The company has already won two coal blocks in the state, at Recherla and Chintalapudi.

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Coal gasification converts coal into synthesis gas, or syngas, which can be used to generate power or as an industrial fuel. An aluminium business could potentially allow Reliance to use fuel generated through its coal gasification operations for energy-intensive aluminium and alumina production.

“They are considering an entry into metals production to utilize the fuel generated from coal gasification to improve its commercial viability,” said the person cited by Mint.

According to UNI, sources said a potential aluminium venture could help Reliance integrate its coal gasification plans with aluminium metal production. However, the sources stressed that nothing has been confirmed and that the company is still evaluating the opportunity.

The possible move comes shortly after Reliance proposed an investment of Rs 2.73 lakh crore over 30 years to develop what was described as India's first integrated underground coal gasification complex in Andhra Pradesh.

The aluminium industry is highly energy intensive, requiring significant power for processes including alumina refining and aluminium smelting. Metals industry sources cited by UNI said coal gasification can therefore be integrated with large-scale metals and mineral processing operations.

Reliance's possible entry would also come as the Adani Group prepares for a major expansion into the sector. Adani Enterprises Ltd announced in July that it plans to invest about $11.5 billion to develop a 2-million-tonne-per-annum aluminium project in Odisha in partnership with UAE-based International Holding Company.

This sets up the possibility of the two conglomerates competing in a sector where established producers already have significant capacity.

Vedanta Aluminium is currently India's largest aluminium producer, with annual capacity of about 2.5 million tonnes, according to UNI. Hindalco Industries, owned by the Aditya Birla Group, has aluminium production capacity of about 1.4 million tonnes, while state-run NALCO has capacity of about 0.5 million tonnes.