None of Hindalcos coal blocks stuck, Birla tells shareholders

Written by fe Bureau | Mumbai | Updated: Sep 12 2012, 07:12am hrs
Aditya Birla Groups flagship company Hindalco Industries chairman Kumar Mangalam Birla on Tuesday reassured shareholders that none of the companys projects and coal blocks are mired in the on going illegal coal block allocation scam that was brought to light by the Comptroller and Auditor General (CAG).

None of the companys coal blocks are stuck because of the coalgate scam, Birla told shareholders at the companys 53rd annual general meeting in Mumbai. None of our ongoing expansion projects and greenfield projects will get delayed because of this.

Last month, a CAG report questioned the basis of the governments method of coal block allocation and criticised the government for opting not to choose a competitive bidding method. CAG said 155 such coal block allocations had resulted in windfall gains of over R10 lakh crore for those who were allocated the coal blocks.

Hindalco, currently, is in the final stages of setting up aluminium plants at Madhya Pradesh and Orissa. It recently got approval for mining coal at the Mahan coal block to fire its captive power plants for the 395,000 tonnes per annum aluminium plant at Mahan.

Birla told shareholders that the company will be spending roughly R10,000 crore on capital expenditure in India apart from a further $1.5 billion for Novelis expansion and Greenfield projects.

All of the companys major strategic expansions in Brazil, South Korea and the United States are on track, he said. In Brazil we would be investing $380 million, in US it will be $200 million and in Korea we will put in $400 million.

The company will also invest $250 million for a recycling plant in Europe and venture into China by setting up an automotive sheet metal plant for $100 million.

Importantly, we have ventured into China with a plant that will initially focus on automotive sheet finishing capabilities, Birla said.

This will further solidify our global automotive leadership position.

The Hindalco chairman also added that power costs are pinching aluminium producers globally. Power prices continued to exert upward pressure on the aluminium cost curve, especially in Europe, said Birla. Aluminium smelters have been hit hard by recent fuel price increases, as well as carbon emission costs, which are set to grow further in the coming years.

Birla added that Hindalcos performance has been better than most global aluminum producers.