Nalco's alumina exports in rise by 50% the first half

State-run National Aluminium Co's alumina exports in the first half of the current fiscal vaulted 50 per cent from a year ago, mainly on account of the capacity expansion undertaken by the company. In the six months to September, Nalco exported 638,000 tonnes of alumina compared with 425,000 tonnes in the same period of fiscal 2012-13, the company said recently. The jump was largely because the blue chip company has expanded production capacity.

"We have exported nearly 50 per cent more alumina during the first half of this year. It has led to good realisations," Nalco chairman and managing director Ansuman Das said. "Our production has increased by nearly 11 per cent and it has been driving up exports of alumina." Late last month, the alumina major decided against selling surplus alumina to domestic companies, saying it would be "against the long-term interests of the company". The move is likely to affect Anil Agarwal-led Vedanta Group's plans in India.

London-listed Vedanta had requested the Odisha government to urge Nalco to sell its surplus alumina to its bauxite-starved refinery at Lanjigarh. According to Das, Nalco is likely to produce 2 million tonnes of alumina this fiscal, of which the company will use up 800,000 tonnes and convert it into metal, leaving a surplus of 1.2 million tonnes.

Bhubaneswar-headquartered Nalco is focusing more on exports of alumina, which offers higher premium compared with metal aluminium, which is stuck in a low price band on the benchmark London Metal Exchange (LME). In the international market, alumina is moving in the $320-325 per tonne range, which in rupee terms comes to about Rs 18,500 per tonne. The rupee depreciation has also helped Nalco make higher gains.

The LME price of the metal is hovering around the psychologically low of $1,800 per tonne, close to a price at which large producers are forced to take a call on whether or not to rest capacity and shun losses. Nalco's metal production is estimated to touch 3 lakh tonnes this year, of which a significant portion is earmarked for exports.

While Nalco's focus remains on exports, the company is also pursuing plans to set up a 0.5-million tonne greenfield smelter in Odisha's Sundergarh district to utilise its surplus alumina. The plan, however, hinges on the company being allotted a captive coal block.