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Balco strike not to hit aluminium sector

A strike by workers against the government's move to privatise Bharat Aluminium Company (Balco) has hit daily aluminium production, but is unlikely to affect the country's long-term supplies, officials and analysts said on Monday.

"The daily loss in aluminium output because of the strike is about 270-285 tonnes," a Balco official said.

"There will not be any major impact on the country's aluminium production if the strike is called off in the next few days," a metals analyst told Reuters.

The strike by thousands of employees against the government's decision to sell its controlling stake in Balco to copper producer Sterlite Industries, the first big privatisation case in a decade of reforms, dragged into its third day on Monday.

The Balco official said in New Delhi that the company's aluminium smelter at Korba in central India had not been functioning for the past three days though some workers were trying to maintain a minimum temperature at the smelter.

The firm has a total workforce of 7,000 employees and the government has barred the new management from retrenching any worker in the first year.

Political issue

Balco which has its own mines, smelter and power plant produces about 15 per cent of the country's aluminium output of about 618,000 tonnes a year.

Set up in 1965 it runs a 200,000-tonnne-per-annum alumina plant and a 100,000-tonne aluminium smelter at Korba, in the newly created state of Chhattisgarh. It also has a 40,000-tonne hot and cold rolling mill at the plant.

Union leaders said around 4,500 workers were on strike, and they had vowed not to let any Sterlite official enter the plant.

The Balco official said workers were mentally prepared to accept the privatisation of the firm and nearly 90 percent of them were willing to return.

"It has now become a political issue," the official said.

The central government last week defeated a parliamentary motion against Balco's privatisation, after opposition parties accused the government of selling Balco too cheaply.

The Congress party-led government in Chhattisgarh says the privatisation of Balco will damage the interests of tribal people as they had parted with the land in the hope a state-run firm in their region would improve their social and economic livelihood.

Analysts said they expected the strike to be resolved soon and loss in production would not be huge.

"Sterlite might take a long-term view and some disruptions in the production process of Balco will not have much impact on the company," Prem Nath, manager (base metals), Bank of Nova Scotia said.

Nath said he expected Sterlite to bring in new technology for the upgradation of Balco and reduce cost of production of the metal.

He added that the company had a history of reviving sick aluminium company Malco.

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