The aluminium smelter project, part of Gujarat Mineral Development Corporation (GMDC)'s ambitious Rs 15,000-crore aluminium park in Kutch, Gujarat, has been put on back burner as GMDC and its partner National Aluminium Company Ltd (Nalco) are yet to finalise the terms and conditions for it.
GMDC plans to set up a one-million-tonne alumina refinery and a 5 million tonne aluminium smelter. But Nalco, has been wary of the proposition with regard to smelter, as converting alumina into aluminium is very power intensive.
Sources said that Nalco has expressed its concerns about setting up a smelter and had asked GMDC to arrange electricity at a rate of up to Rs 2.2 per unit. "If that works out, Nalco has expressed its willingness to invest in setting up the smelter as well," they added.
However, GMDC officials maintained that once alumina refinery is set up, smelter project will be taken up after period of 3-4 years.
They said that the entire project would be executed in phases and in first phase the alumina refinery will be set up with an investment of Rs 4,400 crore. "In phase one, we have decided to set up the alumina refinery in partnership with Nalco. The smelter will take some more time as things are not yet finalized between the two companies in this regard," said a source close to the development.
Earlier, GMDC had chalked out plan to set up alumina refinery and aluminium smelter having capacity of 5 million tonnes. But, both companies could not arrive at a consensus on both parts of the project, involving investment of nearly Rs 15,000 crore.
A GMDC official maintained that the project proposal for the alumina refinery is pending for approval from the board of directors of Nalco. "The proposal for the project is with the board of directors of Nalco. They have to take the investment decision. Once they clear the project, then things will start moving forward," said the official.
"Both the boards have given their consent for 80 per cent of the clauses of the project agreements. GMDC has asked Nalco for around 26 per cent equity share for the Rs 4,400 crore refinery project," a source privy to the development informed.
Nalco has finalised the bauxite supply agreement and project agreements with GMDC while the boards of directors of both the companies have in principle approved the agreements.
