National Aluminium Company Ltd. (NALCO) is planning to invest ₹1,500–2,000 crore to commercially extract critical and high-value minerals from red mud and fly ash, according to people familiar with the company’s plans, marking one of India’s most ambitious circular economy initiatives in the metals sector.
The state-run aluminium producer has lined up multiple pilot-scale facilities aimed at recovering gallium, iron, alumina, rare earth elements (REEs) and construction-grade materials from industrial waste streams generated during aluminium production.
Results from the pilot phase are expected within the next 10 months, after which the company will take a call on scaling up to commercial operations, officials said.
Red mud — a highly alkaline waste produced during alumina refining — has long posed an environmental and storage challenge for aluminium producers globally. India generates 5 million tonnes of red mud annually, most of which remains underutilised.
NALCO’s proposed programme seeks to convert this liability into a resource by extracting critical and valuable minerals while reducing long-term environmental risks.
According to officials, one of the key projects involves setting up a pilot plant with a processing capacity of 30 tonnes per day to manufacture construction bricks from red mud after the removal of iron. The project is being positioned as a first-of-its-kind attempt globally to use processed red mud for large-scale construction material production.
Gallium Recovery Project
In parallel, NALCO is establishing a Pilot Scale Demonstration Facility (PSDF) to recover gallium — a critical metal used in semiconductors, power electronics and electric vehicles — using indigenous technology developed jointly with the Bhabha Atomic Research Centre (BARC) and the Heavy Water Board (HWB).
Gallium has been identified as a strategic material amid growing global supply chain concerns, particularly following export restrictions imposed by China.
“NALCO’s focus is on developing domestic capabilities for critical mineral extraction using waste streams, rather than relying on imports,” an official said on condition of anonymity. “The gallium recovery project is especially significant because it is based entirely on indigenous technology.”
The company is also collaborating with CSIR–Institute of Minerals and Materials Technology (CSIR–IMMT) to set up a pilot plant for producing iron–titanium (Fe–Ti) alloys from red mud. The project is aimed at enabling bulk utilisation of red mud while creating value-added alloy products for industrial use.
Fly Ash Extraction
In another first for India, NALCO is setting up a pilot facility, again with CSIR–IMMT, to extract alumina and rare earth elements from fly ash — a waste product from coal-based power plants. The project has received approval from the Ministry of Mines and is aligned with the government’s broader push to recover critical minerals from secondary sources.
Officials said the pilot phase across these projects is expected to conclude within the next 10 months. Based on performance, recovery rates and commercial viability, the company will then move towards full-scale commercial plants. “Commercial production will follow only after the pilot results are evaluated and stabilised,” one of the officials said.
The company has already announced plans to invest ₹30,000 crore by 2030, including ₹18,000 crore for a new aluminium smelter in Odisha and ₹12,000 crore for a coal-based power plant. It is also exploring acquisitions of bauxite and coal mines to secure raw material supplies and has indicated interest in bidding for critical mineral blocks in India.
Reducing Import Dependence
The push into critical mineral recovery comes at a time when India is seeking to reduce import dependence for strategic materials used in clean energy, electronics and defence. The Centre has been encouraging public sector companies to explore non-traditional sources such as industrial waste, tailings and fly ash as part of its critical minerals strategy.
Industry experts note that while the technology risks remain significant, success could position NALCO as a pioneer in circular economy practices within the metals sector. “If even a part of this scales commercially, it could change how aluminium waste is viewed — from an environmental burden to a strategic resource,” said a metals sector analyst.
Officials cautioned, however, that timelines and investments would depend on pilot outcomes, regulatory approvals and market conditions. “These are complex extraction processes, and scaling them safely and economically will be key,” one official said.