)
Gujarat Mineral Development Corporation (GMDC)’s ambitious Rs 15,000-crore aluminium park in Kutch, Gujarat, is again staring at hurdles.
GMDC wants to set up a one-million-tonne alumina refinery and a 50,00,000-tonne aluminium smelter. However, its partner, National Aluminium Company (Nalco), is wary of the smelter, as converting alumina into aluminium requires mega power generation. On condition of anonymity, a senior Nalco official told Business Standard, “For the smelter, we put a condition in the bid that GMDC should arrange electricity at a rate of up to Rs 2.2 a unit. That is the viable power cost for any smelter. So, investment in the smelter is conditional. If they can arrange electricity at Rs 2.2 a unit, they have the smelter; if this is not possible for them to arrange, there would be no smelter.”
B L Bagra, director (finance) of Nalco, didn’t reply to queries.
If the two companies decide not to set up the smelter and, instead, go ahead only with the plans for the refinery, the project cost would be reduced to Rs 4,400 crore.
According to the tender GMDC floated, the company would supply bauxite, while the partner would account for all the investments to set up the refinery. However, now, GMDC is keen on picking up 26 per cent stake in the joint venture. In December, GMDC Chairman G S Gadhvi had told Business Standard the company might buy 26 per cent stake in the venture by using its internal accruals. If needed, it could even borrow some funds, he had added.
In April, a detailed project report would be presented to the Nalco board, which would decide on the company’s investment in the joint venture. The Nalco official said the company was keen on letting GMDC hold 26 per cent stake, as this would ease the monetary pressure on Nalco.
In 2010, GMDC had floated tenders to find a partner. However, it had to extend the deadline twice, as it couldn’t find any takers. In November 2011, it finalised Nalco as a partner for the project.
Since then, the project’s progress has been at a snail’s pace.
