Hindalco, the country’s biggest metals company, has formed a JV with state-owned Mahanadi Coal and Neyveli Lignite Corporation to develop coal blocks in Orissa to feed a forthcoming aluminium project. The venture is scheduled to develop blocks for a thermal power project at Hindalco’s captive power plant, which is part of its upcoming aluminium project in the state.
While the flagship company of the Aditya Birla Group will hold 15% stake in the JV company, the Coal India-subsidiary MCL will have 70%. Neyveli will control the remaining 15%. The JV will be formed in the next three to six months, said Hindalco in a statement to the BSE.
Shares of the company were down 1% at Rs 158.40 on the BSE on Monday. The JV company will have a capacity of 20MT. After beginning operations in 2010, the venture will feed about 3MT of coal every year to the power plant, which is part of Hindalco’s aluminium project in the state.
The company’s $1.8 billion project includes a 1MT alumina refinery, a 2.5 lakh tonne aluminium smelter and a 660MW captive power plant.
The JV will develop the Talabira II and III coal blocks. Hindalco’s other major initiative in the state is the Utkal Alumina project.
Its partner in the project, the Canada-based Alcan, opted out of the venture earlier this year. Hindalco has the option to buy out its erstwhile partner’s 45% stake in the project. In February this year, Hindalco bought Canadian company Novelis in a $6 billion acquisition, propelling the Indian company among the top five integrated players globally.
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