Narendra Modi govt asks Nalco to ditch $2 bn Iran plan

05 December 2016

The Centre has asked state-run National Aluminium Co (Nalco) to do a rethink on the company’s proposal to build a $2-billion smelter unit in Iran, and instead consider setting it up in mineral-rich Odisha.

Speaking on the sidelines of the Make in Odisha conclave in Bhubaneswar, power, mines and coal minister Piyush Goyal said: “So far they (Nalco) are looking at setting up a plant in Iran. So I have asked the board to reconsider that.”

“I believe that we should make in India… Ideally it should be in Odisha where the material is mined,” he added. The conclave has been organised by the government of Odisha and the Department of Industrial Policy and Promotion.

In May, Nalco signed a memorandum of understanding (MoU) with the Iranian Mines & Mining Industries Development Renovation Organization to jointly explore the possibility of setting up the smelter in Iran. The smelter was expected to be part of a joint venture aluminium company that Nalco would establish in Iran, which will utilise the supply of alumina from the state-run company’s refinery in India.

Nalco has been exploring the feasibility of setting up a 500,000-tonne-per-year smelter and an associated power plant in West Asia.

On Coal India, Goyal said that the centre has no plan to split the the world’s largest coal miner, as such a move would not add any value.

Media reports earlier suggested that the government was considering splitting Coal India into seven different independent companies.

“I have made my view known in June 2014. Coal India’s strength comes from it being one company,” Goyal said.Talks of breaking Coal India gained momentum in recent months on grounds that the government wants to address the inefficiency of the coal sector to boost electricity generation. This is because coal makes up for over a half of India’s power generation and is still the cheapest raw material for electricity production.

Goyal had earlier said the government will not split Coal India but will work towards improving its efficiency and performance. The company accounts for over 80% of the country’s coal production. It is aiming to produce 598 million tonneof the fossil fuel in 2016-17 and 1 billion tonne by 2020.

The government had withdrawn a similar proposal to split Coal India in 2014, thanks to massive protests by the company’s union, representing over 350,000 of its employees.

Source – FE