Indian aluminium giants National Aluminium Company Limited (Nalco), Vedanta Resources plc, and Hindalco Industries Ltd. have joined in a petition to the state government of Odisha seeking revocation of a recent gargantuan hike in the state’s power duty that they say has had a tremendous negative impact upon production costs.
Odisha’s power duties have risen twice in the past several months, first by fifty percent to ₹0.30/kwh eighteen months hence, then almost doubling to ₹0.55/kwh in recent days. According to smelters, that translates in a jump in production costs of US$61.90 per metric ton.
Dr. Tapan Kumar Chand, head of both Nalco and the Confederation of Indian Industry as well as a council member of the Aluminium Association of India, said in a statement released yesterday that the increase made little sense in a time when both domestic and global markets were struggling. Chand also pointed out that such an increase is likely to sour investors who are looking at India as a destination for their investment cash.
“All neighboring states with whom the products of the state of Odisha compete in the domestic market are having electricity duty within the range of 0% in Andhra Pradesh and Telangana, to 32% in Chhattisgarh,” Chand explained.
Chand went on to warn the state that both Nalco and the Confederation had not taken the idea of injunctive relief off the table. He reminded the government that the Captive Power Plant Federation had already won partial relief against the state on the same issue.