Alcoa in talks with Indian companies to sell surplus alumina

 

 

With an output of 16 million tonnes a year, Alcoa is the world's largest alumina producer. The company entered India in 2001 when it teamed up with Hindalco to bid for Balco, which was eventually acquired by Sterlite Industries. It has since been building its presence in the high-value, high-quality aluminium segments. 

 

 

"There is a renewed focus on India," Alcoa India managing director Vishal Seth told ET. "We sell about half of our production to various companies on annual contracts. We plan to bring some of our Australian alumina production here." Alcoa is in talks with Vedanta Aluminium and Hindalco Industries among other Indian companies, people close to the development said. 

 

 

Alumina is an intermediate compound that is smelted to make aluminium metal. Alloys of aluminium are used in aircraft bodies, rail wagons, cars, beverage cans and consumer goods. 

 

 

State-owned Nalco, which is Asia's largest alumina producer, sells part of its produce to Indian producers. Nalco produces 1.5 million tonnes of alumina a year. 

 

 

Since Vedanta Aluminium and Balco do not have complete captive bauxite mines, they buy alumina from the domestic and international markets to feed Balco's smelting operations. 

 

 

Hindalco also buys alumina for its smelter at Renukoot in Uttar Pradesh. 

 

 

Alcoa is not keen on building a greenfield smelter and refinery in India because of the delays in getting government approvals and clearances. But it wants to expand its presence in the country's mid to downstream markets, which make products for construction, food processing and car wheels. 

 

 

"We are open to joint venture arrangements or even for outright acquisitions as the company currently has a healthy appetite for such transactions in India," said Seth, who took charge of the Indian operations in January.

 

 

Alcoa, which has shut down about 12% of its smelting capacity worldwide due to high energy costs, is building a $10.6 billion refinery-cum-smelter through a joint venture with Maaden Aluminum in Saudi Arabia. The plant is scheduled for completion by 2014. Mining majors are planning to build presence in the Middle East to cash in on the abundant gas supplies, which reduces their energy costs.