Nalco has been in the process of setting up a 5 lakh tonnes aluminium smelter in Iran, where is can get natural gas at cheap rates. Power accounts for 40 per cent of the input costs in making aluminium.
"Our priority is to reduce imports under the Make in India initiative, hence we have asked them (Nalco) to revisit their decision to process alumina in Iran," Mines Secretary Balvinder Kumar told PTI.
During Prime Minister Narendra Modi's visit to Iran in May, Nalco had inked a MoU with the Iranian Mines & Mining Industries Development & Renovation Organisation (IMIDRO) to jointly explore possibility of setting up the smelter.
The pact also envisaged tolling arrangement with existing smelters in Iran for producing aluminium from alumina supplied by Nalco.
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The move was aimed at making Nalco a low-cost alumina producer and help it compete in global markets by leveraging low-cost power available in the Middle-East.
It takes around USD 1,400-1,700 to produce one tonne of aluminium metal, with alumina and power each accounting for 40 per cent of the costs and other raw materials the remaining 20 per cent.
India, which is facing a spate of cheap imports from China and some Middle East nations that is adversely impacting its domestic producers, expects demand for the metal to hit as much as 5 million tonnes by 2020.
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