India's Aluminum Production to Reach 5 Million Tons by 2015

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Researched by Industrial Info Resources India (Delhi, India)--The Indian government has projected its annual aluminum capacity to grow from the present 1.3 million tons to 5 million tons in 2015. "All the major primary metal producers are expanding their capacity," Mines Minister B.K. Handique said, addressing an aluminum summit. "It is strongly believed that capacity of 5 million tons of production by 2015 will be achieved." Handique said the metal production was likely to grow to 10 million tons per year by 2020, and expressed confidence that the Indian aluminum industry will be among top three global producers in 2015.

Demand for aluminium is estimated to grow at 6% to 8% per year, in view of the low per-capita consumption in India. Also, demand for the metal is expected to pick up as the outlook improves for user industries, such as power, infrastructure and transportation. India has massive bauxite reserves of about 3 billion tons.

In India, aluminum metal is produced by just a few dominant players in the market. These include companies like Hindalco Industries Limited (Mumbai) and National Aluminum Company Limited (Bhubaneswar). The recent spate of mergers and acquisitions has led to market consolidation, leading to less competitive pressure. The companies are increasing value addition to aluminium products to protect themselves from high volatility in the industry.

An improvement in demand has led to all the major aluminum producers' expanding their capacities. National Aluminum Refinery Company is planning to double the capacity of its alumina refinery at Damanjodi. For supplying Bauxite to this facility, it also has embarked on the expansion of its bauxite mine in that area.

A majority of Indian producers use Bayer-Hall-Heroult technology for aluminum production. Energy costs total 40% of the manufacturing cost for metal and 30% of the manufacturing cost for rolled products. India is a net exporter of alumina and aluminum metal at present. The ongoing reforms in the power sector and the focus on improving power infrastructure are expected to further boost the aluminum sector in India.

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