Balco to Implement Modernization Plan to Increase Output to 1 MTPA

Balco to Implement Modernization Plan to Increase Output to 1 MTPA

Citing a rally in the worldwide aluminium market, India’s Bharat Aluminium Company Limited (Balco) announced plans last week to boost production to one million metric tons per annum. The firm, which is a subsidiary of Vedanta Resources plc, has put off the production increase, which was planned for 2013.

The proposal is for Balco to modernize and expand the facility located in Chhattisgarh’s Korba district. Vedanta’s Chairman Anil Agarwal visited the facility earlier last week for the first time after becoming the majority stakeholder in 2001 and subsequently told company officials to restart the program and implement modernization at once.

“The company would be investing Rs 10,000 crore (US$1.5 billion) for the expansion plan,” a Balco spokesperson told the media. The spokesperson elaborated by saying that the existing facilities would be dismantled and a new plant with modern technology would be assembled in its place. The new facilities would increase existing capacity to 1 million metric tons per annum.

At the present time, Balco has a production capacity of 575,000 metric tons per annum, but the plant is unable to run at full capacity due to power constraints. In a separate, earlier transaction, the firm is assembling a 1200 mW power plant to alleviate power issues. Balco obtained the nearby Chotia coal mine via auction to power the new plant.

In addition to the plans already mentioned, Balco is exploring the purchase of bauxite mines in Madhya Pradesh and Chhattisgarh. The mines the firm is operating at present will supply its operations for only another three years.

Balco was founded as a state-owned company (“public-sector undertaking”) in 1965. It began production of aluminium nine years later. The firm was entirely state owned until 2001, when it divested 51% of its stock to Sterlite Industries India Limited. The Indian government continues to hold a 49% stake in the company.