Infrastructure and power push in Union Budget likely to ramp up aluminium demand: NALCO CMD

Bhubaneswar (Odisha) [India] January 19 (ANI): India's aluminium demand is likely to remain strong as the government is expected to continue its emphasis on infrastructure development and power sector expansion in the upcoming Union Budget, said National Aluminium Company Ltd (NALCO) Chairman and Managing Director Brijendra Pratap Singh.
"When infrastructure development comes, the requirement of the power sector will also grow, and these two areas are the biggest drivers of aluminium demand," he told ANI in an exclusive interview.

He said that as the vision of the government is to make India a Viksit Bharat by 2047, and for that, every budget the country is seeing a lot of thrust on infrastructure development.
Continued government capital expenditure on infrastructure, transmission networks and urban development would jack up aluminium consumption, particularly in conductors, cables and construction-linked segments, he said.
He added that policy support for power and energy transition would be critical for sustaining growth in the aluminium sector.
Against this backdrop, NALCO is scaling up alumina production to higher levels. Singh said the company's refinery produced 20.5 lakh tonnes of alumina last year, while the target for the current year was 22.5 lakh tonnes.
"As of now, we are ahead of target, and we are very much sure that by the end of this year, we will be completing around 23 lakh tonnes," he said.
On aluminium metal output, Singh said NALCO's installed smelter capacity stands at 0.46 million tonnes, or 4.6 lakh tonnes. "Last year we produced 4.6 lakh tonnes. This year we have targeted 4.7 lakh tonnes, and we are ahead of that target as of now," he said, adding that the company was confident of achieving the full-year target.
To support higher volumes and margins, NALCO is focusing on cost reduction through efficiency improvements. "We are working on improving techno-economic parameters such as caustic soda consumption, CPC coke consumption and coal tar pitch consumption," Singh said. "By increasing volumes and improving efficiency, we are reducing costs and maximising revenues."
NALCO is ramping up alumina output to about 23 lakh tonnes in FY26, from 20.5 lakh tonnes last year, even as prices remain under pressure. "Last year our average alumina price was around USD 585, this year it is USD 340-350 per tonne," CMD Brijendra Pratap Singh said, adding that higher volumes and efficiency gains are helping offset the price decline.
NALCO has also laid out a major long-term expansion roadmap. Singh said the company plans to set up a new 0.5 million tonne aluminium smelter, along with a 1,080 megawatt captive power plant.
"We have already started the DPR-making process and appointed consultants," he said. "In the next six to eight months, we will complete the DPR, get board approvals and start the tendering process."
Groundwork for the new smelter and power plant is expected to begin around March-April next year, Singh said, adding that the project would take three to three-and-a-half years to complete. "Our target is to commission the plant by end-2030 or early 2031," he said.
Capital expenditure for the current year stands at around Rs 2,000 crore, Singh said. Near-term priorities include commissioning of the upstream alumina refinery and starting production at the Potangi bauxite mines by June 2026, where the mine development operator has already been awarded.
Alongside new mining additions, Singh said NALCO's existing Panchpatmali (Parbatmali) bauxite mines continue to provide long-term raw material security for its alumina operations.
"Our present bauxite mines, including Panchpatmali and Potangi, will last for another 16 to 17 years at current capacities," he said.
To ensure continuity beyond that period, Singh said additional bauxite blocks are expected to come up for auction and NALCO plans to participate, while also seeking allocation on a nomination basis strictly for captive use, as the company does not undertake commercial mining of bauxite.
Singh said the biggest structural challenge for the aluminium industry remains power costs and sustainability. "Power accounts for 35 to 40 per cent of aluminium production cost," he said. "All captive power plants are thermal, and carbon emissions are high."
While green power is the long-term solution, Singh said availability and cost remain hurdles. "Green power is not available round the clock. With battery storage, it can be, but the cost goes up," he said.
"If battery costs and transmission charges come down, then long-term green power PPAs will become viable."
He added that strong domestic demand from the power, infrastructure, construction, EV and packaging sectors is expected to continue supporting aluminium consumption in the coming years.
Speaking to ANI at the Bhubhneshwar-based NALCO smelter and plant's cast house, Ashutosh Rath, Executive Director said the company is an integrated bauxite-alumina-aluminium-power-coal complex with bauxite mines and an alumina refinery in Koraput, Odisha.

About 50 per cent of the alumina produced is sold in domestic and international markets, while the rest is used at the smelter, the heart of NALCO, he said. Alumina is converted into liquid aluminium through electrolysis, with a smelting capacity of 0.46 million tonnes per annum. Molten metal is cast into ingots, billets, wire rods and rolled products. NALCO operates a 1,200 MW captive power plant at Angul, supported by coal from Utkal D & D mines.
Rath said refinery, smelter and power plant expansions, along with new bauxite mines, are planned by 2030 to move NALCO towards Maharatna status.
Talking on the CSR funds, NALCO's Chairman and Managing Director, Singh, said, "Our CSR target this year is about Rs 79 crore, but we have taken up projects worth nearly Rs 90 crore, going beyond the statutory requirement".
The company has a commitment to inclusive growth, focusing on health, education, skilling and community development, he said, adding that the company has exceeding statutory norms on CSR, driven by stronger revenues and a focus on sustainable development in nearby and tribal regions. (ANI)