Australian firm proposes alumina refinery at Vizag

Australian-based BHP Billiton today proposed to set up a huge alumina refinery plant with a capacity of 3 million tonnes per annum near Vizag, at an estimated investment of over $ 2-3 billion, if the Andhra Pradesh government agrees to provide sufficient bauxite reserves besides SEZ status among other things.

Rody Sale, consultant of BHP Billiton along with other members of the company, met chief minister Y S Rajasekhara Reddy here on Wednesday and gave a presentation on their proposal in the state to him.

BHP sought an allocation of a whopping 300 million tonnes of proven bauxite reserve for the first phase of the project. It may be recalled that the state government recently signed an MoU with Jindal group on setting up of a refinery and smelter plant with the production of about 2.5 lakh tonnes of aluminium.

As per the projections of the company team, government revenue due to alumina refinery in the first five years would be Rs 2,700 crore while it would be Rs 20,250 crore on the aluminium smelter over the life of the project. Direct employment at peak is estimated at 1,800 persons.

However, the government, on its part, has not made any commitment with regard to the allocation of bauxite reserves as required by the company during the presentation. When contacted, Sabita Reddy, minister for mining, said that priority would be given to the public sector Nalco company.

"We will consider the proposal of the BHP only if Nalco backs out of its plans," she said, adding that a final decision would be taken in a couple of months time.

Considering the total quantum of over 600 million tonnes of bauxite reserves available in the state, the government is of the view that only two projects can be accommodated. Jindal group has been allocated over 240 million tonnes of bauxite reserves.

Nalco representatives had met the Reddy in April, 2005 and expressed their interest to set up alumina and aluminium plants in Andhra Pradesh.