Hindalco, MP govt sign deal for Rs 7,700-cr smelter plant

Aditya Birla group company Hindalco today signed a deal with the Madhya Pradesh government for a Rs 7,700 crore greenfield aluminum smelter plant in Sidhi district.

The deal, signed in the presence of Chief Minister Shivraj Singh Chauhan, Power Minister Kailash Vijayavergiya and Finance Minister Raghavji, will ensure necessary clearances for the project on forest, mining and land acquisition.

The principal secretary, department of commerce and industries, and Debu Bhattacharya, managing director of the company, signed the deal.

"The MoU with the government marks yet another milestone in our goal of making Hindaclo a non-ferrous metals powerhouse in aluminum, our chairman visions to make the company among top 10 global players," said Bhattacharya, managing director of the company.

The greenfield project entails to putting up a 325,00-tonnes aluminum smelter, a 750-Mw captive power plant and a jointly-owned captive coal mines.

Speaking to Business Standard Bhattacharya said, "Our experience is very good with the government since we are already present in the state with a Viscose staple fibre plant in Nagda, a rayon grade caustic soda unit at the same location and a cement plant in Jawad.

The new plant, which is coming up near Bargawan (near Orgai village) will have take at least four years to complete its first phase.

"We have been allotted 3.5 million tonnes of coal from Mahan coal mines and further allocation has been sought by the company to expand the capacity for second phase," said RK Kasliwal, advisor to Hindalco.

The firm has raised Rs 3,080 crore through internal accruals and Rs 4,620 crore through debt.

Utkal alumina project in Orissa will supply raw material alumina to the project. The company has an access to 195 million tonnes of bauxite reserves which will be enough for 65 years life.

While Mahan coal blocks in the Sidhi district have been allocated to Hindalco and Essar jointly. Both the firms have already signed an MoU for the purpose and have formed a company Mahan Coal Company Ltd.

Although the state chief minister has assured the firm of all cooperation, the firm is still awaiting clearance for facilitation and consent for land acquisition and related infrastructure, consent for grid connectivity, banking and wheeling construction power, back-up power and water availability.

The firm is expecting Rs 2,800 crore per annum and Rs 400-500 crore revenue to the state exchequer and value addition of Rs 1,500 crore to the state. The plant is expected to generate employment to 500-4,000 people.