Adani Enterprises and Abu Dhabi-based International Resources Holding (IRH), an IHC Group company, through 2PointZero, announced plans to form a 50:50 joint venture (JV) to develop an integrated greenfield aluminium project in Odisha with an investment of $11.5 billion (about Rs 1.08 lakh crore). The JV signed a Memorandum of Understanding (MoU) with the Government of Odisha on Thursday to develop the project.
The project will comprise a 4 million metric tonne per annum (MMTPA) alumina refinery, a 2 MMTPA aluminium smelter, a 4,000 MW captive power plant and a 1 MMTPA downstream manufacturing park. It will be developed in two phases over five years, with investments of Rs 66,000 crore in the first phase and Rs 44,000 crore in the second.
Competitive Landscape
The project would make Adani Group a major player in India’s aluminium manufacturing segment. The country’s aluminium industry is currently dominated by Aditya Birla Group flagship Hindalco Industries and Vedanta’s recently demerged Vedanta Aluminium. Hindalco has an annual aluminium production capacity of 1.34 million tonne, alumina capacity of 3.85 million tonne and a downstream capacity of 600 kilo tonne (KT), while Vedanta Aluminium has a consolidated annual aluminium production capacity of 2.4 MTPA.
Vedanta Aluminium has set for itself a target of reaching 10 MTPA over the next 5 years, Vedanta Chairman Anil Agarwal said recently. Hindalco in January announced investments to expand aluminium capacity from 1.34 million tonne to 1.72 million tonne through additional capacity at Aditya Smelter. It also plans to increase alumina capacity to 4.7 million tonne at its Aditya refinery. The firm is also evaluating expansion at its Mahan smelter in Madhya Pradesh, which currently has an annual capacity of 371 KT.
“The proposed project reflects our confidence in Odisha as a long-term manufacturing destination. The proposed JV between Adani Group and IHC Group will further strengthen our robust partnership. Together with the Government of Odisha, we will build an integrated aluminium ecosystem that creates jobs, expands value-added manufacturing and strengthens India’s industrial competitiveness,” Karan Adani, managing director, Adani Ports and Special Economic Zone (APSEZ), and director, Adani Cement, said.
“At IHC, we are building long-term platforms in industries that will define the future of the global economy. Through IRH, we are building an integrated mining and minerals business, investing across critical minerals to support industrial development, strengthen supply chain resilience and advance the energy transition. This partnership with Adani Enterprises reflects that strategy and our shared ambition to develop a world-class integrated aluminium project that creates lasting economic value,” Syed Basar Shueb, CEO of IHC, said.
Employment Generation
The Adani JV aluminium project will include a 4,000 MW captive power plant to support aluminium production and is expected to generate around 53,500 jobs across construction and operations. During the construction phase, about 35,000 jobs are expected to be created, while mining, alumina refining, aluminium production and downstream manufacturing operations are projected to support another 18,500 jobs. The project is also expected to generate significant indirect employment across logistics, engineering, maintenance and ancillary industries.
The downstream manufacturing park is expected to attract manufacturers producing components for transport, construction, power, packaging, renewable energy and advanced engineering, while supporting the growth of micro, small and medium enterprises. Once operational, the companies said the project would strengthen India’s aluminium manufacturing base and reinforce Odisha’s position in the global aluminium supply chain by integrating the value chain from mining and refining to downstream manufacturing.
While Vedanta Aluminium does not have a significant presence in the downstream segment, Hindalco’s recent focused efforts have led it to touch Rs 1,000 crore in aluminium downstream Ebitda with ambitions to scale four times by FY30.
Following the signing of the MoU, the joint venture partners and the Odisha government will begin the next phase of the project, including land acquisition, statutory approvals and infrastructure planning. Odisha, which has some of India’s largest bauxite reserves, is already a major producer of alumina and aluminium.