Nalco, which holds cash and bank deposits of almost Rs37bn (924.884 US million dollars), has embraced the mantra that the key to long-term success in the metals sector is to be able to play the volume game. It operates a mine in India with an annual capacity of 4.8Mt of bauxite, an aluminium refinery with a capacity of 1.575Mt/y and an aluminium smelter with a capacity of 345kt. For a better return on investment (ROI), the company now feels it is left with no option but to move outside India; Western Asia, being a supply-deficit region, is its most suitable option. After two years of continuous efforts, the company recently made a breakthrough in Indonesia late last year, where it signed a memorandum of understanding (MoU) with the Indonesian government to set up a 500kt smelter and a 1250MW captive power plant in the south Sumatra province of Indonesia. In the beginning, Nalco is planning to set up a 250k aluminum smelter plant, adding a further 250k in the second phase of the project which is likely to commence commercial production in five years time. Local government in Indonesia has assured the company of an adequate coal supply for its power plant. Since power costs are a major proportion of aluminium prices (typically 25-33 percent), only a captive power plant could possibly make the aluminium plant viable - an estimated 15000-16000 kV of electricity is required to produce each tonne of aluminium.
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