Date | Nov 16, 2016:
In order to gauge the feasibility of a proposed aluminium smelter and a gas-based power plant in Iran, a study group comprising senior executives of the state-owned National Aluminium Co. Ltd (Nalco) will visit the Persian Gulf nation next month.
India’s has been strengthening its strategic ties with Iran post the visit of Prime Minister Narendra Modi in May when a deal to develop the Chabahar port was signed, mainly to counter China’s involvement in developing Gwadar port in Pakistan.
Nalco plans to set up a 0.5 million tonne per annum smelting facility in Iran entailing an investment of $2 billion.
The visit also comes in the backdrop of sanctions being eased of on Iran by the US and western nations, leading to firms queuing up for projects in the resource rich nation.
In May, Nalco had signed a memorandum of understanding with the vice-chairman of the Planning Board, government of Iran, to explore the possibility of setting up the aluminium smelter in Iran. Also, a taskforce had been constituted comprising experts from Nalco and Iranian Mines & Mining Industries Development & Renovation.
“A group of executives from Nalco will be visiting Iran early next month to discuss the location of the smelter and the gas price,” said a senior Indian government official on condition of anonymity.
Another Indian government official, who also did not want to be named, said toll-smelting will also be discussed with existing smelters in Iran to produce aluminium from Nalco’s surplus domestic alumina.
“Currently, market situation is not that good. Hence, we are also keeping the option of toll-smelting wide open and it will be discussed with Iran. It will also be assessed whether production of aluminium in the country will be cost-effective or not,” the second official quoted above said, adding that Nalco will hold extensive discussions on the gas price for the proposed gas-based power plant.
According to a Reuters report dated 29 September, India’s mines ministry had asked state-controlled Nalco to rethink its overseas expansion plans and rather focus on domestic value addition.
However, a senior Nalco executive, requesting not to be named, said the Iran project is on and confirmed that a team will visit the country next month to discuss wide range of issues before taking a final call on the project.
According to information available on company’s website, the aluminium manufacturer registered an all-time high production of 6,340,142 tonne of bauxite in financial year 2015-16 and 1,953,000 tonne of alumina. It produced 372,183 tonne of aluminium in financial year 2015-16 registering an increase of 14% compared with the previous financial year.
Queries emailed to the spokespersons of India’s ministry of mines, Nalco and the Iranian Embassy in New Delhi on 16 November remained unanswered.
Experts lauded the idea.
“It makes sense to make alumina where cheap source of power is available. Also, metal prices need to be kept in mind as bounce-back in the prices during the first half of the current financial year is primarily led by liquidity,” said Mahavir Jain, associate director at India Ratings and Research Pvt. Ltd.
Nalco has set a capital expenditure target of Rs.870 crore during the current financial year and is targeting a revenue of Rs.7,100 crore from various operations. It operates an alumina plant at Damanjodi and an aluminium smelting complex at Angul, both in Odisha.
(Source: http://infracircle.vccircle.com/)