NALCO CMD: India's Aluminum Sector Unprepared for Green Transition

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AuthorRiya Kapoor|Published at:
NALCO CMD: India's Aluminum Sector Unprepared for Green Transition
Overview

NALCO Chairman Brijendra Pratap Singh stated India's aluminum sector is unprepared for the green transition, especially with the EU's Carbon Border Adjustment Mechanism (CBAM). Despite strong domestic demand and record profits in FY25, the company faces challenges in securing round-the-clock green power for smelter operations. Singh outlined plans to source 200-300 MW of green power within three to four years and discussed NALCO's Rs 30,000 crore expansion.

Sector Unprepared for Green Shift

National Aluminium Company Ltd (NALCO) Chairman Brijendra Pratap Singh indicated that India's aluminum sector is not yet equipped for a full green transition. This comes as the European Union implements its Carbon Border Adjustment Mechanism (CBAM), a policy designed to tax imports based on their carbon footprint.

Strong Financial Performance

Despite the looming regulatory challenges, NALCO has posted robust financial results. The company achieved its best-ever first half performance in FY25, with revenues up approximately 18-19% and profits surging by about 47%. Expectations remain high for the third quarter, buoyed by strong London Metal Exchange (LME) prices, which account for nearly 70% of NALCO's total revenue.

Green Power Hurdles

The primary obstacle to decarbonization lies in securing stable, round-the-clock renewable energy. Aluminium smelting is highly power-intensive, and any disruption can severely impact operations. NALCO aims to source 200-300 MW of green power, constituting 20-30% of its current 800-900 MW consumption, within the next three to four years. This involves exploring solar, wind, or hybrid solutions combined with battery storage, though current costs remain high.

Expansion and Critical Minerals

NALCO is embarking on a significant Rs 30,000 crore expansion plan, set to be commissioned by the end of 2030 or early 2031. This will nearly double its smelter capacity to 1 million metric tonnes. Concurrently, the company is progressing in critical minerals exploration through Khanij Bidesh India Ltd (KABIL), with invasive exploration for lithium in Argentina expected to yield results by mid-2027.

Market Dynamics and Strategy

NALCO has consciously increased its focus on the domestic market, as export prices have been less favorable. The company is also evaluating opportunities in domestic critical mineral auctions. Regarding aluminum scrap imports, NALCO advocates for stricter quality standards and an increased import duty to align with that on primary aluminum.

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