India to improve capacity of aluminium production by 2020

In the present scenario, widespread campaigns of fuel conservation have led to usage of light weight vehicles. This further inspired the automotive industries to go for aluminium as the base material. According to data acquired from International Aluminium Institute, total production of aluminium in October 2015, has reached 4,908 thousand metric tonnes worldwide. Remaining on the top, China produced about 2,675 thousand metric tonnes, which is 44% of world total. Aluminium is generally extracted from its ore. The ore is known as bauxite. India holds seventh largest bauxite reserves, almost 3% of the world’s total. However, India produces only 8% of the total world production which puts a big question mark on the nation’s capability in aluminium production.

The Indian Aluminium sector is run by three producers. Two of them are controlled by private groups namely BALCO (Vedanta) & Hindalco (Aditya Birla), and the third is controlled by the public sector unit National Aluminium Company (NALCO). The major cost affecting component in manufacturing aluminium is power. The extraction involves electrolysis, and manufacturing plants are mostly located near abundant resources of thermal or hydraulic electricity. These, along with large economies of scale and unavailability of advanced machineries are major barriers to production. However, Alcoa (Aluminium Company of America) forecasts an increase in the world aluminium production and an improvement in capacity of the Indian aluminium smelters such as Hindalco and Vedanta by the end of 2020.

Recently, many Indian companies are investing heavily in the aluminium sector especially in automotive industries. From door panels, bonnets, radiators to equipment inside the engine space, Aluminium is fast replacing steel in the automotive industry than in any other industry. Along with primary production, recycling of aluminium has also captured most of the investors’ attention recently. As mentioned, by, Asia’s largest integrated primary Aluminium producer Hindalco Industries Ltd has made a capital expenditure of US$ 5.5 billion since 2009. It clearly ascertains the expected dynamic growth of aluminium sector in coming years.

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