Nalco, Tata to put big money in SA smelting pot

New Delhi, July 18: India's state-run aluminium giant National Aluminium Company Ltd (Nalco) and the Tata Group are likely to sign a joint venture agreement within a fortnight to set up a 5 lakh metric tonne (mt) aluminium smelter and power plants in South Africa at a cost of Rs 15,000 crore.

"Nalco and Tata will jointly build a smelter and power plant in South Africa and we hope to conclude an agreement with the Tatas within a fortnight to this effect. Initially we have proposed to set up a 2.5 lakh mt smelter worth Rs 10,000 crores with a provision to ramp it up to 5 lakh mt capacity at an investment of another Rs 5,000 crores," Nalco chairman and managing director C R Pradhan told The Indian Express.

In the proposed JV, Pradhan said Tata Africa will have a 49 per cent stake, while Nalco will hold 51 per cent stake. But signing the JV would require approval of the Tata Board and whether it has okayed the JV or not could not be immediately confirmed. The PSU is understood to have secured the government's approval for the venture, which is expected to be set up at South Africa's Richards Bay area of Kwazulu-Natal province wherein the power plant of more than 1000 MW is likely to come up.

The JV aims to leverage Tata's presence in Africa and on operations, production and project implementation expertise of Nalco in the aluminium sector. Meanwhile the Navratna company is in the midst of a major capacity-expansion and will spend Rs 40,000 crores for the purpose over the next five years. The company's growth plans include brownfield and greenfield growth projects within the country, and smelter and power projects in Indonesia, South Africa and Iran.

The PSU has started planning for the third phase of expansion at its existing facilities in Orissa at an investment of Rs 6,000 crore for which the work would begin by the year-end. The expansion will help the company increase its bauxite mining capacity to around 90 lakh tonnes, alumina refining to 30 lakh tonnes, alumina smelting to 6.3 lakh tonnes and captive power generation to 1700 MW per annum.

Rs 15K cr

The cost of the proposed aluminium smelter and plower plants to be set up in South Africa

5 lakh mt

The capacity of the proposed aluminium smelter

Source: The Indian Express