Mining ministry for selling 10% Nalco stake

The mining ministry is in favour of disinvesting 10 per cent stake in National Aluminium Company (Nalco).

The department of disinvestment, however, has proposed to keep the limit at 20 per cent. But no final decision had been taken in this regard, Minister of Mines Sis Ram Ola said today.

Replying to a question in the Rajya Sabha, Ola said the department of disinvestment had sent a proposal to the mining ministry in April this year, seeking its views on off-loading 20 per cent stake in the PSU. "This ministry favours 10 per cent disinvestment in Nalco," Ola said.

The government currently owns 87.15 per cent stake in the company. The idea of disinvestment in Nalco had been proposed by the National Democratic Alliance government, but was shot down because of political opposition.

The original plan was to sell a 29.15 per cent stake in the company and hand over management control to a strategic buyer.

There had been plans to sell a further 10 per cent to domestic investors, 20 per cent through an American depository receipt issue, and 2 per cent to employees.

The finance ministry again revived the proposal. It wrote to the ministry of mines to consider selling off 20 per cent government stake in Nalco. The ministry of mines is yet to officially respond to it.

Nalco, which is raising its bauxite mines capacity from 48 lakh tonnes per annum to 63 lakh tonnes, alumina capacity from 15.75 lakh tonnes to 21 lakh tonnes, and aluminium production capacity from 3.45 lakh tonnes to 4.60 lakh tonnes annually, would require funds, and ,therefore, company executives said they favoured the company being allowed to raise money itself.