MP misses deadline on Hindalco deal

Aditya Birla group company Hindalco's Rs 7,700 crore greenfield aluminium (alumina smelter) project in Madhya Pradesh is facing delay.

Though Industry Minister Babulal Gaur had announced the government would sign a memorandum of understanding with Hindalco on April 5 (as reported in this newspaper last month), there was little consensus among state government officials on this.

Hindalco has proposed to tie up with Essar for coal mines in the Sidhi district of Madhya Pradesh. The Sidhi coal mines will supply fuel to the alumina smelter plant.

"We have to get consensus from all departments concerned to go ahead with the project," said a top officials in the department of industries.

The principal secretary, department of industry, O P Rawat, told Business Standard, "We will soon sign the memorandum of understanding; we have received the consent of all departments concerned and the memorandum of understanding will be signed soon."

The company will raise funds through internal accruals of Rs 3,080 crore and Rs 4620 crore will be via debt; thus the project will have 40 per cent internal accruals and 60 per cent debt. It will be commissioned in four phases by 2009.

Hindalco has plans to set up a Rs 4,450 crore aluminium smelter plant, which will have a 3.25 lakh tonne capacity. A coal bed power plant of 750 Mw (4X150 Mw and 1X150 Mw standby) captive plant in capacity will also be commissioned there to run the plant smoothly.

Hindalco and Essar have join hands for 3.5 million tonne per annum captive coalmines. Government of India is reportedly has recently allotted Mahan coalmines to Hindalco and Essar. The firm has decided to set up the smelter plant in Orgaria and Bargawan villages of Sidhi district on an area of 5,000 acres.

Hindalco is expecting Rs 2,800 crore turnover from this project with Rs 400-500 crore revenue and. The project, if takes shape, will generate 5000 direct and indirect jobs.

Hindalco has repeated its demand in procuring 5000 acres of land, additional land for residential colony, ash bund area, coal mining operation and transportation and land for implementation of rehabilitation package for displaced persons.