Hindalco on expansion drive; to double alumina capacity

The Aditya Birla Group will double capacity at its alumina unit in Orissa after receiving environmental clearance, stealing a march over rival Vedanta Resources that was recently forced by the government to halt a similar expansion over environmental and tribal concerns.

Aditya Birla group company Utkal Alumina currently has the capacity to make 1.5 million tonnes of alumina, a key raw material for making aluminium. ''We went to the environment ministry for approval for the expansion and we have got it,'' Debu Bhattacharya, managing director of group flagship Hindalco Industries, told The Economic Times on Friday.

Expansion of alumina refineries is integral to metal companies such as Utkal Alumina and Vedanta Aluminium as it not only gives a higher capacity for conversion into aluminium metal, but also offers opportunities to boost profitability by selling it in the open market. State-run National Aluminium Co (NALCO) is Asia's largest producer of alumina.

Bauxite for Utkal Alumina comes from the group's own mines located at the Baphlimali hills in Raygada district of Orissa.

The move by the Birlas will likely push Utkal Alumina ahead of Vedanta Aluminium in the alumina league table, as the Anil Agarwal-controlled company currently has a capacity of 1 million tonnes at Lanjigarh.

Vedanta had started work to take the capacity to 6 million tonnes, but stopped last month after the central government said it had not sought prior approval for the expansion. (See: Government shuts down Vedanta's Orissa project)