Nalco Considering Sale of Alumina to Vedanta

India’s National Aluminium Company (Nalco) may finally be given the green light to sell alumina to private-sector rival Vedanta plc, as the Indian government has requested the state-owned firm to look into sales of the aluminium precursor to the London-based miner.

Both Nalco and Vedanta operate refineries and smelters in the eastern state of Odisha, but only Nalco has its own bauxite mines to draw from. Vedanta has attempted to buy alumina from Nalco, which has sufficient surplus to sell on the global open market, but all such efforts have been strenuously opposed by Nalco’s labor unions.

This latest development couldn’t come at a better time for Vedanta, as the company recently announced that it will ramp up production at its smelter in northwestern Odisha over the next three years to two million metric tons per annum.

Mines Minister Piyush Goyal earlier this month expressed surprise that the majority of India’s alumina is exported instead of being sold to domestic aluminium companies. He said he was shocked to learn that Nalco’s capacity for alumina production is less than half that of its private-sector competitors. Goyal went on to explain that the market was not the only force acting against value-added alumina. India’s PSU has also been pressured to send alumina overseas.

Nalco was established in 1981 as a public sector company administered by the Ministry of Mines. It is the largest integrated aluminium complex in Asia, and the sixth largest in the world.