State-owned National Aluminium Company Ltd. (NALCO) is facing a significant setback in its major ₹30,000-crore expansion project. The ambitious plan, which aimed to boost the company's aluminium production, has been put on hold for about a year.
This delay is mainly because key talks for technology sharing with Rio Tinto Canada fell through, and negotiations with NTPC for power supply also stalled. At 9:27 AM, NALCO share price was up 0.14% and was trading at ₹182.98.
The core issue behind this delay is Rio Tinto Canada's decision not to share its special smelter technology. NALCO was relying on this technology for its new aluminium plant.
Because this deal didn't work out, NALCO now has to completely redraw its Detailed Project Report (DPR), which is essentially the blueprint for the entire expansion. This means going back to the drawing board to figure out how to proceed without that specific technology.
Adding to the challenge, NALCO's discussions with NTPC for a dedicated power supply have also not progressed as planned. Power is a huge requirement for aluminium smelters, and securing a reliable and cost-effective source is crucial for such a large-scale project. Due to these issues, NALCO has also reduced its expected power need for the project from 1,200 MW to 1,080 MW.
NALCO's ₹30,000-crore investment was designed to build a brand-new aluminium smelter with a capacity of 0.5 million tonnes per year (mtpa). This new smelter would have also come with its own power plants to ensure a steady electricity supply. The company had initially hoped to have this massive expansion ready by the financial year 2030 (FY30).
However, recent developments have pushed back this timeline. As per news reports, the company will begin actual spending for this project from the fiscal year 2027-28. This is a noticeable shift, indicating that the company's big investment push and project rollout will happen later than originally planned.
This delay means that NALCO's growth plans will slow down for a while. The company will need to find alternative technology solutions and secure its power supply before it can move forward. While a one-year delay might seem minor for such a large project, it can impact future production targets and market position.
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NALCO's ₹30,000-crore expansion is a significant undertaking for the state-owned company. The recent challenges with technology partnership and power supply highlight the complexities of such large-scale industrial projects. While the delay is a setback, NALCO is actively re-evaluating its plans to ensure the project can eventually move forward, albeit on a revised timeline.
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Published on: Jun 5, 2025, 9:31 AM IST
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