Search the Internet          Tips  Sites: Finance, Investment

Balco plans to treble aluminium capacity

India's third-largest aluminium maker, unlisted Bharat Aluminium Company, is likely to complete an expansion by 2005 that will triple its capacity, an official of its group said on Monday.

Balco, which makes about 15 per cent of India's aluminium, has plans to raise its aluminium capacity to 334,000 tonnes from 100,000 tonnes a year.

It is also increasing alumina capacity to 830,000 tonnes from 180,000 tonnes, both at an estimated cost of Rs 50 billion ($1.02 billion).

"We are currently preparing a detailed feasibility report and looking for some funding institutions," said an official of Sterlite Industries, which acquired 51 per cent of Balco from the government in early 2001.

The study is likely to be completed in the next three to six months, he said, and it would take another 30 months to complete the project.

Sterlite is also looking at doubling capacity from 169,000 tonnes per annum at Hindustan Zinc, in which it purchased a 26 per cent stake from the government in March for Rs 4.45 billion.

"A final decision will be taken only after evaluating all the related factors," the official said, on condition of anonymity.

Balco, based in the central Indian town of Korba, also plans to raise capacity at its own power unit to 810 MW from 270 MW.

Sterlite said in May it planned to fund Balco's expansion through equity of about Rs 20 billion, and the remainder through debt.

The official said that production at the Korba smelter, whose operations were hit by a strike last year, had stabilised and output was close to the full capacity.

The smelter was forced to shut operations for more than two months by a strike by the workforce of nearly 7,000 who opposed Balco's privatisation.

Balco is expected to produce about 105,000 tonnes of aluminium during 2002-03 (April-March) against 70,000 tonnes in the previous year, the official said.

ZINC CAPACITY

Hindustan Zinc, the country's largest zinc and lead maker, has yet to decide whether to set up a new smelter or expand the capacity at its existing plant, the official said.

The government had earlier approved a plan by Hindustan Zinc to set up a new smelter with a capacity of 100,000 tonnes a year.

"Both the options are open," he said.

Hindustan Zinc owns six mines with a combined annual capacity of 3.49 million tonnes of zinc and lead.

It hopes to produce 200,000 tonnes of zinc in the current fiscal year, up from about 176,000 tonnes last year.

ALSO READ:
The Balco Saga
More Money Headlines