Aluminium industry should get coal blocks to increase production: NALCO

Himanshu Vatsa | The Dollar Business

Allocating coal blocks for the aluminium industry is the key to increase the indigenous production of the metal, said the National Aluminium Company (NALCO), a public sector unit. The price of aluminium is controlled by the London Metal Exchange. In India, the production of aluminium is solely dependent on coal energy. Therefore, procurement of coal is a major challenge for the industry. “Aluminium Industry, being a power intensive industry, requires a lot of power. Around 40% of the production cost of aluminium is power. Unless we get coal in a preferential way, we cannot compete with IPPs (Independent Power Producers). They are not treating this CPP (Captive Power Plants) on a different footing. So, it is not possible for us to beat them (IPPs) and get coal at aggressive prices and again compete in the LME,” Sudeepta Kishore Dash, Executive Director, NALCO, told The Dollar Business. Dash said that NALCO has already sent a proposal to the coal ministry, seeking allocation for the mineral. “That proposal is already there with the government. We have been sending proposals to the government to consider alluminium sector as a preferential sector,” he said. Dash said that the production of aluminium can be increased by providing cheaper coal to manufacturers. “In fact, 33% of our production capacity is stopped. We are running with 66% only now,” he said, adding, “In case we get cheap coal then we can produce with full capacity. Then there is a scope for exports.” Dash also asked the government to promote the use of recycled aluminium to increase the demand of the metal. “Recycling is also an important factor. This is a green metal. It can be recycled any number of times. And the quality doesn’t reduce,” he said. Dash also expressed his concern over falling prices of aluminium in the international market and suggested the industry to focus on research and development to explore new applications of the metal. “The international prices of alluminium are going down day by day. It is putting a major constrain on Indian alluminium manufacturers. The development of new application is one of the biggest challenges to provide base for the investment plan. R&D has to be one of the focus areas for creating newer applications of alluminium. Investment in new technology can be supported by the aluminium industry and the government to encourage such activities,” he said addressing a seminar on ‘India Minerals & Metals Forum’ organised by the Indian Chamber of Commerce. Though the Indian aluminium manufacturers are facing challenges due to dip in consumption and cheaper metal supplied from China, the industry leaders expect a rise in domestic consumption with the revival of automobile industry and manufacturing growth within the country.    

June 24, 2015 | 5:51 pm IST.