Adani Enterprises and Abu Dhabi-based natural resources investment platform IHC Group have signed a Memorandum of Understanding with the Odisha Government to invest ₹1.08 lakh crore to set up an integrated aluminium project from mining to value-added products. IHC Group will make the investment in the project through its subsidiary 2PointZero.
As part of the largest foreign direct investment in the metallurgy sector, the 50:50 joint venture (JV) company will set up a 4 million tonnes per annum alumina refinery at the foothill of the Sasubahu Mali bauxite mine in Rayagada district, besides a 2 MTPA aluminium smelter, a 4,000-megawatt (MW) captive power plant including 400 MW of green energy and a 1 MTPA downstream manufacturing park at Sundargarh district, which is close to a coal mine.
The project is expected to generate about 53,500 jobs across construction and operations.
Karan Adani, Director, Adani Enterprises, said, “The project will take 12 months to get all the approvals and another 3-4 years to set up the first phase of the project which will include the alumina refinery, power plant and aluminium plant.”
He added that the company’s portion of investment of ₹54,000 crore in the project will be funded through a mix of internal accruals, 70 per cent debt and 30 per cent equity.
Mohan Charan Majhi, Chief Minister of Odisha, said the state will make an entry into the global aluminium supply chain and value-added product manufacturing with the new project.
The investment will enable Odisha to develop the complete aluminium value chain, from mining and refining to smelting and downstream manufacturing, creating greater value within the state, he added.
Asked what will be the role of Odisha Mining Corporation, Adani said the state government company has a lot of bauxite mines and the new JV company will be working with the Government to get a long-term bauxite linkage besides bidding in the mine auction.
On the necessity to enter the aluminium sector, he said the entire process of aluminium production is energy intensive and Adani being the low-cost energy producer, it made sense for the Group to enter this sector.
Odisha also has all the elements to make aluminium production most cost competitive, he said.
Moreover, with all the emphasis on digitisation and manufacturing in the country, the demand for aluminium will go up and the Group sees long-term opportunity in this space, he added.
Asked whether the company will be competing with established players like Hindalco and Vedanta Aluminium, Adani said even with such large capacities India still imports large quantities of aluminium, which clearly is a sign of additional demand and there is going to be enough room for everyone in this market.
“If done at a very competitive rate, India can be a net exporter of aluminium as well. We are not looking to compete with anybody as there is enough room for everyone,” he added.
(The reporter was in Odisha on Adani Group invitation)