There is widespread resentment among people as PSU National Aluminium Company (Nalco) has miserably failed to harness locally-found natural resources for value addition in several stages which could create wealth and large-scale employment directly and indirectly. In a letter to the Union Minister of Mines, NGO JANMAT, while strongly criticising the Nalco management for its failure to implement many important projects since long, has urged him to intervene in the issue.
Presently, the London Metal Exchange (LME) aluminium price has risen 14% sequentially and 55% over the year earlier in the three months ended June. That’s because of the increasing demand for the metal due to an accelerated pace of vaccination in the developed economies. The higher LME price benefited the Nalco. Over the last three months, aluminum stocks have rallied in the range of 9%-47% with the Nalco gaining the most.
Recently, Union Minister Dharmendra Pradhan urged the Union Mines Minister to push through the long-deliberated expansion of Nalco. From the production of bauxite to making of alumina and its smelting into aluminium, the Nalco has all of its operations centred in Odisha. The company has in its possession the high-alumina-content bauxite, improved logistics including a 14.6-km long conveyor belt at Panchpatmali in Koraput. But still, it has done little for capacity building and development of value-added products (VAPs). The company has failed to deliver on its growth promises.
Odisha has emerged as the aluminium capital of the country as it alone holds 51% of India’s bauxite resources. Odisha in general and the Nalco in particular has a huge scope for further expansion of various aluminium and aluminium-related projects for the economic development of the country and Odisha.
India presently has an aluminium smelting capacity of 4.1 million tonnes. In the mean time, private companies like Hindalco and Vedanta have built large greenfield smelters and raised their capacities to over 1.3 million tonnes and 1.75 million tones, respectively, and have enriched their VAP portfolios by producing more flat rolled products, foils and extruded items. The VAPs give much better EBITDA than smelted aluminium. But even after getting all Government and public support, the Nalco has failed to increase its smelting capacity to over 1 million tonnes. The Nalco has an only 460,000-tonne smelter and a 2.275-million tonne alumina refinery capacity though it has enough bauxite resources to support much larger operations. The company has repeatedly projected false dreams since years together to the people about its new and expansion projects.
Nalco has also repeatedly failed to decrease its energy cost by not operating its allotted coal blocks. The company has failed to implement timely the VAP projects like aluminium park at Angul. The inordinate delay on the part of the Nalco management in implementing the various projects has deprived the company of earning more and also the State of developing economically.