Nalco making windfall gains from recent spike in global alumina prices

Globally, alumina prices have surged 80 per cent since the US clamped sanctions on major Russian producer Rusal

National Aluminium Company (Nalco) is garnering windfall gains from the recent spike in global alumina prices. The company’s changed strategy to sell all of its surplus alumina at spot or index prices, instead of sealing long-term contracts, is bound to boost its revenue and profit.

Alumina contributes nearly 75 per cent to its Ebitda (earnings before interest, taxes, depreciation and amortisation). According to Nalco’s calculation, every $10 a tonne rise in international alumina prices boosts its Ebitda by Rs 850 million. Over the years, it is alumina and not aluminium that has been driving the government-owned navratna company’s profitability.  Each