Andhra Pradesh that is endowed with sizeable bauxite reserves is fast gearing up to capitalise on this aluminium-making mineral. The east coast state that shares a border with bauxite-rich Orissa is likely to see the emergence of significant alumina refining capacity in the near future. The mega project of Anrak Aluminium Pvt. Ltd promoted by a UAE-based company is now in physical execution mode while two other large projects are fast crystallising.
Currently, Andhra Pradesh merely sells bauxite, the principal ore for aluminium, without any benefit of value addition accruing to the state. Once local capacities for alumina and aluminium come up, the state could derive tremendous socioeconomic benefits, experts believe.
Speaking to Projectmonitor by phone from Hyderabad, M.V. Prasad, General Manager, Andhra Pradesh Mineral Development Corporation Ltd, said that the state had proven bauxite reserves of 560 million tonnes accounting for a fifth of India's total of some 2.6 billion tonnes. All these reserves are found in Visakhapatnam and East Godavari districts, Prasad explained.
The Visakhapatnam and the contiguous East Godavari districts in north Andhra Pradesh abutting Orissa share much of Orissa's geological properties, which explain the high incidence of bauxite. Orissa has an overwhelming 60 per cent of India's bauxite reserves.
The APMDC official explained that there was a possibility of the state having more bauxite reserves. "The presence of a further 400 million tonnes of bauxite in the two districts is currently being investigated," Prasad elaborated.
Three projects for producing alumina are on the anvil with an estimated investment of around Rs 24,000 crore. Anrak Aluminium Pvt. Ltd has made good progress in its greenfield project that involves setting up of a 1.5-million tpa alumina refinery, a 90-mw captive power plant and a 0.25-million tpa aluminium smelter. The total investment, to be made in phases, is around Rs 8,000 crore. "Land for the project has already been given and APMDC will be supplying bauxite to the proposed refinery," Prasad said. Hyderabad-based Penna Cement Ltd is partnering UAE-based Anrak Aluminium, it is reliably learnt.
Anrak's project had faced much antagonism from private land owners over compensation issues. After a series of negotiations with land holders, nodal agency Andhra Pradesh Industrial Infrastructure Corporation Ltd in February this year was able to hand over 1,900 acres of land to Anrak, while another 300 acres has been kept for rehabilitating project-affected persons.
The aluminum complex is coming up at Makavarapalem mandal of Visakhapatnam district. The project is progressing well with major orders placed on FLSmidth in August and more recently, on IVRCL group company Hindustan Dorr Oliver (see page 13).
JSW Aluminium, promoted by the Jindal South West Group, has planned to set up a 1.4-million tpa alumina refinery and a 0.25-million tpa aluminium smelter, supported by a captive power plant, in Vizianagarm district. The project is currently awaiting environmental clearance, a source familiar with the project said. JSW has planned to invest Rs 8,000 crore in the project taking shape at Srungavarapukota, commonly referred to as S. Kota. The project was earlier to come up in Visakhapatnam district but was relocated over land-related issues.
Public sector National Aluminium Company Ltd has made plans to invest Rs 6,000 crore in bauxite mining and alumina refining in Andhra Pradesh, making it the public sector company's biggest investment outside home state Orissa. Very recently, the Centre approved grant of mining lease to Nalco for the Gudem and Katamraju Konda bauxite blocks. Located in Visakhapatnam district, the two blocks are estimated to hold 85 million tonnes of bauxite. Nalco has planned to build a 1.4-million tpa alumina refinery through self-mined bauxite. The PSU is India's largest alumina producer clocking 1.58 million tonnes of production in 2008-09.
These investment intentions augur well for Andhra Pradesh that is soon poised to emerge on India's aluminium map that is currently dominated by Orissa and Uttar Pradesh.
Aluminium value chain
In the aluminum making process, bauxite-the principal ore-is refined into an intermediate product called alumina that is then smelted to yield aluminium metal. Typically, three tonnes of bauxite are needed to produce one tonne of alumina and two tonnes of alumina are used to make one tonne of metal. In the Indian context, it could take around five tonnes of bauxite to produce one tonne of alumina, experts feel. With around 2.6 billion tonnes, India has the fifth largest bauxite reserves in the world but its share in global reserves is less than 9 per cent.