India's Nalco gets access to Pottangi reserves for refinery project

After over two decades of waiting, India's largest integrated aluminium producer National Aluminium Company Limited (Nalco) will commence mining operations at the Pottangi project, in the eastern province of Odisha, where bauxite reserves have been estimated at 70-million tonnes.

According to a company official, access was critical to Nalco's expansion project to construct a one-million-tonne-a-year greenfield alumina refinery at Damanjodi in proximity to the virgin Potttangi reserves, at an estimated capital outlay of $880-million.

The grant of the Pottangi bauxite reserves had been caught up in administrative and regulatory wrangling between the provincial government of Odisha and Nalco, and the company's third phase expansion plan was delayed by several years owing to the absence of bauxite linkage for construction of a new alumina refinery, the official said.

In fact, as a result of the delay in securing raw material closer to its home base in Odisha, Nalco had even toyed with tentative plans to move to the western coastal province of Gujarat and had signed an agreement with Gujarat Mineral Development Corporation (GMDC) in 2012 to source bauxite and construct an alumina plant on the west coast.

However, this plan also failed owing to differences between Nalco and GMDC on the terms and conditions of the proposed joint venture.

The Mines Ministry, the administrative authority for the government-controlled and managed Nalco, had taken up the issue of the delay in the grant of Pottangi with Prime Minister Narendra Modi, in April. Following this, the Prime Minister intervened in communications with Odisha Chief Minister Navin Pattanaik, resolving the issue of mining rights and access to the aluminium major, a Ministry official said.

After the grant of the mining rights was formalised last month, Nalco secured board approval for construction of the greenfield smelter and to start mining at Pottangi before the end of the year, the official added.

Nalco currently operated a 2.28-million-tonne-a-year aluminium refinery linked to its Damanjodi bauxite mines with capacity of 6.82-million tonnes a year. The alumina is then fed into a 0.46-million-tonne-a-year smelter located at Angul, in close proximity to the mines in Odisha.

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