Feature

Aluminium : The Metal of the Future

(Paper presented at Alcastek 2006)
TL Palani Kumar CEO (Aluminum), Vedanta Resources

uses across various region expected to drive the growth. After hurricane Katrina, the increasing demand for the metal in the USA is expected to bring in a one-time increase in the demand for aluminum products. From current estimates it is clear that aluminum inventories which are tracked by the metal exchange in New York and London will fall by two-thirds Global Scenario by the end of 2006, reducing supplies The global demand for aluminum is likely to grow at 4-5% during the to demand equivalent of three and a fag end of 2005, with specific endhalf days. On the GLOBAL SCENARIO - ALUMINIUM other hand high alumina production losses and the resulting shortage in the world are adding to high supply pressures on the aluminum market. Due to this smaller smelters dependent Estimated capacity in the year 2007 is ~36.85 Mn Tonne on alumina from the Source : Brook Hunt - May 2005 market have been

Amongst all metals, Aluminum today, is the most sustainable material. At the current levels of production, proven bauxite reserves will last for hundreds of years. Going by recent projections, the estimated production of this highly versatile metal will be close to 37 million tonnes by the year 2007.

forced dot reduce production or shut down. Domestic Scenario Worlds fourth largest economy (PPP basis) GDP growing at the rate of 8% plus p.a. Industrial production growth at 10% plus p.a. Strong infrastructure growth Good investment climate Very low per capita metal consumption offers domestic growth opportunity Attractive operating environment and tariff protection Wealth of under-exploited mineral resources Access to inexpensive labour and power Location advantage to service SE / Asia and China Interestingly, the domestic annual production of aluminum has increased at a CAGR of 7.3% during FY2001-

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05. Aluminum production during H1FY 2006 was 0.5 million tonnes, an increase of 8.2% over the corresponding previous year. This growth is expected to continue in FY2006, based on increasing demand and rising prices backed by a

present levels of 0.6-0.8 kg / per person. Aluminum Railway Wagons, Composite Panels for Construction, Panels and Die Cast Metal for the Automotive Industry and Thick plates for Aircraft and Ship Building is the

BALCO is working closely with Indian Space & Research Organization (ISRO) and Vikram Sarabhai Space Centre (VSSC) to develop special high grade aerospace alloys and a facility for manufacturing thick plates will be on stream from Q1 FY06

SECTOR - WISE ALUMINIUM CONSUMPTION - WORLD AND INDIA

Source : AFF - Oct 2005

strong LME. There has been a consumption growth of 15% in the first half of this fiscal. This demand growth of 14-15% is expected to continue for the rest of the year with the highest growth rates in the power, automobile, and construction sectors. New Product Development There are 3000 users of aluminum, of which only around 300 uses are prevalent in India today. All players of the Indian aluminum industry needs to work hand in hand to develop & implement newer uses so that the per capita consumption in the country can see a rise from its

future for Aluminum value added products in India.

Integrated Producers vs. Downstream Producers: Integrated producers, who have their own bauxite mines and captive power plants, stand to gain in this scenario. In the present context, downstream stand-alone producers who were earlier working on a low volume-high margin basis need to cut down on their margins and start working on a high volume-low margin basis for sustaining their business. In India today Hindalco and Nalco are among the lowest cost producers of the world. With its own Alumina refinery coming up in Lanjigarh in the next 2-3 years, Vedanta, will propel itself into the top 25 percentile of the lowest cost producers of the world. The world has suddenly woken up to the rich Indian bauxite reserves and trying to get a share of the ore especially in the state of Orissa. This has led to increased employment opportunities. Vedantas Alumina refinery in Lanjigarh is fast nearing completion. It has provided to the local community faster economical development in the backward Kalahandi district of Orissa. The biggest success as far as Balco is concerned is the way the

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company has turned around post the disinvestment. The numbers speak for themselves, but more than that, additional employment generated from the large expansion has benefited the local community also. The quality of life has improved manifold leading to a happier and healthier work force.

second by the end of 2010. Once this Project is commissioned then the total smelting capacity of Vedanta will reach 1 million TPA including all expansions and turn the company into one of the largest integrated producers of Aluminium in Asia.

emissions and effective solid waste disposal. More focused R&D efforts to minimize pollution hazards and energy conservation are needed. All Vedanta plants are ISO9001, 14001 and 18001 certified and strive for matching the best global standards in HSE. Corporate Social Responsibility Being part of the mining fraternity we need to give back to mother nature whatever we take out from her in equal measure which are commensurate to the value of the natural resource. In this context the industry needs to work towards making this world a better place to live in through sustainable development. Literacy, eradication of poverty and basic health amenities needs to be our prime focus in India today. Vedanta has undertaken an ambitious CSR initiative in all its units to ensure good quality of life and a healthy workforce. In conclusion, I would like to reiterate the point that Aluminium is the metal for the future an will contribute immensely to Indias growth. We as an industry need to work together to help increase its use, in many new applications. Let us strive together to position India on its rightful place on the world Aluminium map.

Production (KTPA) Aluminium Production (KTPA)

360,000 MT of this versatile metal will be manufactured in BALCO, Kobra in FY 06 and another 40,000 at MALCO. Incidentally the Korba plants hold the distinction for producing the highest quantity of metal at any single location in India. Vedanta Resources Plc. Has just announced the setting up a $2.1billion (over Rs. 9,500 crore) greenfield aluminium smelter with a capacity of 500,000 tonnes per annum in Jharsuguda, Orissa. The Project will be commissioned in two phases of 250,000 TPA each. The first phase is slated to be commissioned by H2 of 2009 and the

Environmental Concerns The Indian Aluminium industry needs to reinforce its efforts, along with the rest of the world, for sanitizing

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