The Hindu : Andhra Pradesh News : Agreement soon with Nalco for bauxite mining

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Monday, Mar 03, 2008
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Andhra Pradesh

Andhra Pradesh

Agreement soon with Nalco for bauxite mining

Santosh Patnaik

Nalco has promised to start commercial production within one year

The investment outlay in the project is now revised at around Rs.9,000 crores
Nalco has not yet decided whether to locate its smelter in AP

VISAKHAPATNAM: The State Government is clearing the hurdles for clinching a deal with public sector National Aluminium Company for bauxite mining.

According to indications, the memorandum of understanding for leasing out bauxite mines in Visakhapatnam district will be signed ‘very shortly.’

The issue was hanging in fire for past three years and the investment outlay in the project, which was Rs.5,000 crores two years ago, is now revised at around Rs.9,000 crores.

With the Jindal South West Aluminium Limited beginning work for taking possession of the land near S.Kota to launch construction work on the refinery, Nalco and the State officials were engaged in several rounds of talks to revive the project.

Union Minister of State for Mines T. Subbarami Reddy announced recently that an in-principle decision had been taken to allot mines in Gudem and RK Konda to Nalco.

The management of Nalco has also promised to commence commercial production within one year.

Contention

The issue of allowing Nalco, which was proposed before the State signed agreements with Jindal and Ras Al-Khaimah, was deadlocked due to AP Mineral Development Corporation’s objections to grant mining leases directly to Nalco.

The contention of Nalco was that being a public sector company, allotment of leases to it (Nalco) would not come in the way of Samata judgment.

Huge deposits

The Eastern Ghats in Visakhapatnam and East Godavari districts from Sileru to Papikondalu have an estimated 700 million tonnes of metal grade bauxite deposits, according to a survey conducted by Geological Survey of India in 1970s.

Both Jindal and Ras Al-Khaimah have plans for investment of Rs.20,000 crores on alumina refinery and smelter complexes.

Nalco has not yet decided whether to locate its smelter in AP and send it to its Angul smelter complex in Orissa.

Expansion mode

The company is now on expansion mode with an investment of Rs.5,000 crores.

It is also putting its profit in new plants in South Africa and Indonesia.

Sources in the industry said after signing agreement with Nalco, BHP Billiton, mining major from Australia and other companies like Essar will intensify their effort for getting clearance to their investment proposals.

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