The Rs 15,000 crore aluminium plant's joint venture between Gujarat Mineral Development Corporation (GMDC) and Nalco is progressing at a snail pace due to various issues including red-tape. It is finally expected to begin construction in four month’s time.
VS Gadhvi, managing director, GMDC told Business Standard that the two companies have signed the primary agreement to value-add bauxite and now the detailed agreement has been prepared and sent to Nalco. He said that GMDC is expecting Nalco to reply by mid-January and if all other state approvals and details are clarified, to begin construction at the earliest by April.
The project was first envisaged in 2010 when GMDC floated tenders to find partners. But because of the lack of response from companies it had to advance the deadline twice.
The process of finding the partner was delayed by a year and only in November 2011 GMDC chose Nalco as its partner for the project. The company had blamed delays in evaluating proposals coupled with “administrative” delays as the reason for the slow progress.
Its been a year since and the two are yet to close the final agreements and start the plant construction.
An official close to the project said that the GMDC needs the state government’s approvals for the project and that has also contributed to the delays.
The details of the project are yet to be worked out by the two companies. GMDC had floated the tender to find a partner for the aluminium plant saying that the company will supply bauxite from its mines and the party should invest money and build the plant. However, now, the Gujarat-based bauxite miner is ready to consider picking up 26% stake in the capital expenditure.
A one million tonne aluminium smelter and a 0.5 million tonne alumina refinery is being planned at the kutch site.
Gadhvi said, “Our equity portion in the plant is yet to be decided but normally we look at a maximum of 26% stake and the rest with the partnering company.”
At 26%, GMDC’s equity investment in the plant comes close to Rs 4000 crore. The chairman said that the company is cash rich and can fund this money from its internal accruals if needed.
“The money is not required in one go and over a period of 2-3 years we can invest this money. We can also borrow some money if required,” he said.
