Balco, part of Anil Agarwal-led Vedanta Ltd, has said it has shut down its aluminium rolling business due to "steep fall" in the prices of the metal besides dumping from China and falling margins.
The move to close down the rolling mill will affect 500 jobs directly and 200 indirectly.
Mining conglomerate Vedanta Ltd, earlier Sesa Sterlite, holds 51 per cent stake in Bharat Aluminium Company (Balco), while the remaining is held by the government.
"Due to the steep fall of prices in the market for Aluminium, Balco has decided to close down its Rolling Business, which was already reeling under pressure of huge scrap imports, dumping from China and falling margins," the firm had said in a statement last week.
Balco's Head Corporate Affairs BK Sriwastwa said the move will help in eliminating further losses, reducing the overall manufacturing cost, restructuring the overheads and thereby optimising the margins.
"The process has begun with consultations with all related stakeholders and is expected to be completed by early Q3 (October-December) of FY 2015-16," he added.
Balco's rolling mill was commissioned in 1982 and it provides direct employment to 500 people and in-directly to another 200, company sources said.
"The company has been already facing pressures due to raw material and power costs. Now the production cost of aluminium is around USD 2,000 per tonne, while the prices at the London Metal Exchange (LME) slumped to USD 1,600 a tonne leaving the us with no option but to shut down the mill," they added.
Balco produces around 30,000 tonnes per annum of rolled products like aluminium sheets and coils.
