The ambitious plans of National Aluminium Company Ltd (Nalco) to leave a footprint in the wider Asian-African region have failed to fructify with only Rs 8,000 crore smelter plant in Iran showing promise out of a total Rs 46,800 crore worth of projects it has planned in South Africa, West Asia and South East Asia.
The widespread success enjoyed by Indian steel firms has not been shared by other metal industries, such as Nalco, as its experience proves. The Rs 16,000 crore smelter and power plant that the company was setting up in South Africa in joint venture with the Tatas?, is stuck due to non-allocation of coal blocks in the country.
?The South African government has refused to allocate coal blocks and mining leases to companies from outside the country. Coal is vital for out project and as of now things do not look very bright,? Nalco chairman and managing director CR Pradhan said.
The company was expected to sign the MoU with Tata?s early in July. For the JV project, site has been selected for smelter plant at Richards Bay (Port) and power plant of 1,250 mw at Mpu- malanga.
The key issue in South Africa is the availability of power. Due to shortfall, cost of power has gone up by about 25% in South Africa. Getting a coal block and setting up a 1,250 mw power plant is critical to the success of the project and there is a strong possibility that the project can be now scrapped and moved to a country like Congo.
At the beginning of this year, Nalco signed a MoU with the government of Indonesia, to set up a 5-lakh tonne Smelter and a 1,250 mw captive power plant. Nalco plans to invest around Rs 14,000 crore in this greenfield project?a project which has not moved ahead.
?The Indonesian government was to allocate coal blocks to us for the power plant but not much has moved in this regard. The government is yet to act on its promise and as of now the project is stuck,? Pradhan said.
On acquiring 54% stake in the Tajikistan company Talco, Nalco has developed cold feet amidst several litigation pending in the European courts.
According to reports, Talco has recently set a record in the history of litigation by paying the highest fees to its lawyers to defend it in courts. Nalco is now wary of getting it self in a legal mess.
Located in Tursunzoda, is a city in western Tajikistan, Talco already runs the largest aluminum manufacturing plant in Central Asia and Tajikistan?s chief industrial asset. In 2006 Talco produced 416 thousand tonne of aluminum
The only solace for Nalco in terms of its overseas project is the Rs 8,000 crore and 3.1-lakh tonne smelter in Iran, which is on track, and it is expected to be completed in the next six months.
On the domestic front the company has not done any better. Its proposal to set up a cement plant based on fly ash power plant at Angul in partnership with Sree Cement and cement manufacturing company has not taken off. The project worth Rs 300 crore is stuck because both the private partners have not been able to secure mining leases for limestone mining from the government of Orissa.
Nalco is also facing step motherly treatment from the Orissa government as its proposed smelter and power complex in IB valley in Jharsuguda district at an investment of Rs 8,500 crore is in a fix due the non-allotment of water.
Nalco is also presently undergoing its second phase expansion with an investment of more than Rs 5,000 crore, which is on course and scheduled to be completed by this year. The government in April had conferred the Navratna status on Nalco.
