Nalco plans $3.8 billion smelter

National Aluminium Company, India's second-biggest producer of the metal, may build a $3.8 billion smelter in South Africa to benefit from low-cost electricity.

The company plans to build a 500,000-tonne aluminum smelter, complete with a power plant, Chairman C R Pradhan said today by phone from Bhubaneswar. The cost would halve if the company gets power supply from the South African government, he said.

Nalco, as the company is known, said in March it may build a smelter in Indonesia or Persian Gulf countries including the United Arab Emirates, Qatar and Oman to utilize abundant gas and low-cost labor. Electricity accounts for a third of costs of making aluminum, used in car parts, aircraft and beverage cans.

"It hasn't worked out in any of these regions because the terms set by their governments are not feasible,'' he said. "In South Africa we have asked for power supply. If that works out the project cost will exactly halve.''

South Africa would help the company secure supplies of raw material for the venture, a Indian newspaper said on October 20, citing India's junior mines minister T Subbarami Reddy, who recently visited Africa along with Prime Minister Manmohan Singh.

National Aluminium produced 358,735 tonnes of the lightweight metal and 1.6 million tons of alumina last year. It exports more than half of the aluminum-making raw material.

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Mission Africa

Company plans to build a 500,000-tonne aluminum smelter, complete with a power plant in South Africa

South Africa would help the company secure supplies of raw material for the venture

National Aluminium produced 358,735 tonnes of the lightweight metal and 1.6 million tonnes of alumina last year

It exports more than half of the aluminum-making raw material

It was looking to build a smelter in Indonesia, Gulf nations