Indonesia also on Nalco's radar to set up aluminium smelter

Aluminium maker national Aluminium Corporation (Nalco) is also scouting for locations in Indonesia to set up a five lakh tonnes per annum smelter as it eyes to rationalise cost of operations and cater to the expected rise in demand.

The government had earlier hired consultants to scout for locations for establishing a five lakh tonnes greenfield aluminium smelter and a power plant, where energy is available at competitive prices, a source said.

"Based on the study conducted by the consultants, Nalco has identified Oman and Indonesia. Iran is another country that has come up after the US lifted sanctions against it. Nalco CMD T K Chand also met top Iranian officials last month over this," the source added.

A senior government official confirmed the development, saying the government has now commissioned a detailed study for all the three countries including on the long-term prices (at least 10 years) for gas that can be offered.

Another point is that all the three countries are closer to India in terms of shipping routes and bauxite from mines in India can be shipped to the plant locations in these countries at competitive logistics cost, he added.

Indonesia, among the top 10 gas producing nations with an estimated output of 74 billion cubic meters, has the third largest gas reserves in Asia Pacific (after Australia and China), accounting for about 1.5 per cent of the total global gas reserves, the official said.

Last month, Chand met Iran's Mines and Mining Industries Development and Renovation Organisation head Mehdi Karbasian in Tehran on setting up a five lakh tonnes per annum aluminium plant in the country through a joint venture (JV).

The state-owned firm is looking at the feasibility of setting up such a plant in the Chabahar Free Trade Zone (FTZ) in the Islamic nation.

It takes around USD 1,500-1,700 to produce one tonne of aluminium, with alumina and power accounting for 40 per cent each of the cost and raw materials and others contributing the remaining 20 per cent.

The Navratna firm and Iran's Industries Ministry has set up a task force to deliberate on the proposed smelter and gas-based power plant and come out with a feasibility report by July this year.

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