NALCO enters power sector; to sign MoU with NPCIL news

State-owned aluminium and copper giant NALCO (National Aluminium Co) plans to increasingly enter the energy sector as an independent power producer. The company is exploring thermal, hydro and nuclear options for this, chairman and managing director C R Pradhan said on Saturday. The company has already successfully negotiated a joint venture with state monopoly Nuclear Power Corp of India Ltd to promote a 1000 mw nuclear power plant estimated to cost of Rs8,000 crore, Pradhan told shareholders at the company's annual general meeting in Bhubaneshwar, Orissa. The NCPIL board recently approved the JV proposal and a memorandum of understanding between the two companies is slated to be signed within a month. However, the exact location of the project is yet to be decided, Pradhan said. NALCO will hold a 49 per cent stake in the project, with 51 per cent vested with NPCIL. As per the MoU, NPCIL will be in control of the reactor of the nuclear power plant and Nalco will look after the power generation process after steam is produced using nuclear power. This apart, the 'navratna' PSU is scouting several locations in Orissa, North-east India, and Nepal for hydroelectricity projects. It has already intimated its interest to the Orissa government for developing three hydroelectricity projects between Hirakud and Rengali. Pradhan also said NALCO has achieved 100 per cent capacity utilisation in its alumina refinery and smelter sections, and has also met the sales targets in the last fiscal despite the adverse market conditions. The company achieved a record turnover of Rs5631 crore against Rs5576 crore during the previous year, Pradhan said. Net profit, however, declined to Rs1272 crore from Rs1632 crore in the previous year, mainly due to lower realisation because of the global recession. Pradahan admitted that the company has taken a beating due to the depressed prices in aluminium. ''The second half of 2008 saw the collapse of aluminium prices, which forced many companies to either curtail production or close down smelters. Most of the Indian aluminium producers have been severely affected by the falling LME (London Metal Exchange) prices and resultant lower operating margins,'' he said. ''Domestic Aluminium consumption, which was to grow at 8 per cent in line with the GDP growth earlier anticipated for 2008-09, has achieved a meagre growth of 3.4 per cent. Some of the domestic producers have cut production due to continuous fall in aluminium prices,'' Pradhan added. To meet the changing situation, NALCO is making a foray into energy sector and alos moving into other metals as parts of its diversification plan. The company has started seeking mining leases and mineral concessions in South Africa and other African nations like Congo to venture into newer areas of operation through value addition. Besides diversification, NALCO is also planning to venture into both upstream and downstream fields to leverage its strength in alumina and aluminium business in India and abroad. Accordingly, the company is pursuing an alumina refinery project in Andhra Pradesh and smelter plant in Jharsuguda in Orissa and smelter plants in Indonesia and Iran, Pradhan. The company declared a dividend payout of 50 per cent, worth Rs 322.16 crore. According to company officials, NALCO has almost completed its second phase of capacity expansion on an investment of Rs4,402 crore. This will raise its bauxite mining capacity from 48 lakh tonnes to 63 lakh tonnes, and alumina manufacturing capacity from 3,45,000 tonnes to 4,60,000 tonnes. Along with diversification, the company is planning to leverage its strength in the aluminium and alumina business to set up smelter plants in Indonesia and Iran.