VINOD SOOD

H. MAHADEVAN
INTERNATIONAL BAUXITE ALUMINA & ALUMINIUM SOCIETY

The Aluminium Industry Scenario - India

The Aluminium Industry
Scenario-India

2
Aluminium Consumption
Kg/capita

Other Africa 0.8

India 2.2
Indonesia 2.5
South Africa 3.4
Argentina 4.8
Brazil 7.4
Thailand 10.4
France 16.2
Canada 18.9
China 24.2
Italy 24.8
Japan 28.1
USA 28.7
Taiwan 33.3
Germany 42.1

0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0

Industry Estimates 3
Aluminium Demand In India
KT CAGR: 8%
3500
3260
3020
3000 2795
CAGR: 10% 2705
2588
2500 2423
2200
2000 1877

1515
1500

1000

500

0
FY 09 FY 10 FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 E FY 17 E

Source: Hindalco Industries & Industry Estimates 4

Aluminium Production In India
Company Location 2015 2016 2017 E 2018 E
Korba 1 250 250 250 250 2014, % share of
Korba 2 144 220 260 350
production Production
Jharsugda
525 525 525 525 2 Million Tons
Vedanta DTA
Jharsugda
100 300 775 1250
SEZ
Total 1019 1295 1810 2375
Hirakud 170 193 213 213
Renukoot 408 408 408 408
Hindalco Mahan 282 360 360 360
16
Aditya 184 349 360 360 43 Vedanta
Total 1044 1310 1341 1341
Nalco Angul 339 421 460 460
41 Hindalco
Total India 2402 3026 3611 4176
Nalco
Figures in KT

Source: Industry Estimates

5
Aluminium Imports In India
KT

1800

1600

1400 367

1200 301
281

1000 336
237 Semis
308 354
Un-wrought
800
243 Scrap
600

860
400 738 716
626
200

0
FY 12 FY 13 FY 14 FY 15 E

www.intracen.org
6
Segmental Consumption

7
Aluminium-Power Sector

100 93.4
90
Power Generation in
80 India –GW (5 Year Plan)
70
60 55
50
40
30
20.5 20.6
20 12.2
9.6
10 3.5
0
2008-09 2009-10 2010-11 2011-12 2012-13 2013-17 2017-22
Source: Crisil,CEA)
Planned Investment in Power Sector to drive domestic demand ~ USD 1.3 Billion in
Aluminium. Currently 1 million ton of Aluminium consumed in Power Sector
8
Aluminium - Real Estate

India has maximum number of Mega Cities Real Estate market

1000
853
800

600
$,bn
400

200 121

0 2013 2028

Expected Construction Industry Growth ~ 13% CAGR in next 7-8 years, India likely to be
3rd largest construction market in next 7-8 years.

9
Automotive Production

Production Centers shifting to Light Passenger Vehicle

low cost areas sales,Million
China
United States
India
Brazil
Russia
Germany
France
United Kingdom
Italy
Spain
0 10 20 30 40 50

Source: CRU

India Will be among top 3 by 2030, Current consumption around 30%

as compared to developed countries
10
Anticipated CAGR over 10
years in Different Sectors
2015-2025 Overall CAGR
expected: 7.5 %
12
10
8
6
4
2
0

Source:Industry Estimates 11
Aluminium Production Costs
World
1850
1816 Reduction
1800 1785 • Cheaper Gas based power generation in
Middle East
1750
1723 • Low Gas prices & Government subsidy
1710
• Weaker local currencies
1700
• Lower coal prices and electricity tariffs in
China:
1650
• Reduction in freights:
1608
• China has cut freights by 15%,
1600
benefitting industry .
• Removal of Duty Inversion
1550
• China has removed 8% duty on Alumina

1500 imports
Avg 2012Avg 2013Avg 2014 Avg Jun Avg Jun
2014 2015

Source: Industry Estimates (Aluminium India

2015) 12
Aluminium Production Costs
India
1900

1857 • Higher Coal Cost

1847
1850 Increase • Power cost increased by 51 % and
Energy cost to smelter increased

1800 by 39 % from FY 2014

1788
• Higher logistic cost.

1752 • Rail freight increased by 25 %

1750
from FY 13
1723
• Renewable Power Obligation

1700 • Cost increase by US $ 30 / T

• PAT Cess
• Cost increase by US $35/ T
1650
2012 2013 2014 2015 2016 E

Source: Industry Estimates (Aluminium India

2015) 13
The India Story-Aluminium

The planned investment of over US$ 1 trillion in infrastructure over the

period 2012-2017, as per the 12th five year plan, would provide a great
opportunity to the aluminium industry.

India's consumption of aluminium has grown at a CAGR of 10%, in the last

5 years.

Strong trends also visible in areas like automotive, food packaging and
electrical. It is estimated that the demand would grow at over 7.5 %
CAGR over the next decade.

14
India – Bauxite Resources

Total resources - ~ 3
billion tonnes

Majority of the deposits

fall within 4 Provinces –
Eastern, Central,
Western and Gujarat
Orissa
region
Andhra
Pradesh Resources increased
from 350 Mt in 1971 to
3000 Mt in 1978 after the
discovery of East Coast
deposits.
Bauxite Deposits In Orissa &
Andhra
Deposit Resource Al2O3 Silica Deposit Resource Al2O3 Silica
(Mt) (%) (%) (Mt) (%) (%)

Panchpatmali 360 46.0 2.2

Chttamgondi 28 46.0 2.6
Pottangi 74 44.1 1.4
Kodingamali 91 46.5 2.2 Galikonda+Rak-
21 47.0 2.6
takonda
Sasbohumali 81 41.1 2.6
Baphlimali 199 45.2 2.2 Sapparla 186 46.0 2.5
Sijimali 289 43.2 1.6
Jerrala 239 46.2 1.7
Kutrumali 70 41.4 3.4
Langigarh 73 46.1 3.4 Gudem 38 49.0 2.0
Karlapat 224 40.0 3.0
Katamrajkonda 42 48.0 1.8
Gandhamardan 213 46.0 2.2

Total 1674 Total 554

Additional 647 Additional 400

In use/earmarked
India–Bauxite Characteristics

Province Physical characteristics Mineralogical characteristics

Thick continuous ore Gibbsitic (with alumina as

East Coast bodies with undulating boehmite and diaspore <5%) and
roof and floor low R SiO2

Mostly continuous with Mixed gibbsite-boehmite type

West Coast variable thickness and (with alumina as boehmite <10%
grade and diaspore <2%)
Boehmitic type (alumina as
Central Discontinuous and in
boehmite >10% and diaspore
India the form of pockets
<2%)
Mostly continuous but Gibbsitic, mixed gibbsite-
Gujarat with variable boehmite and diasporic
thickness (alumina as diaspore >5%) types
Initiatives By Government

The Central Government, on 25, March 2015

amended the MMDR -Mines & Metals Development
and Regulation Act to introduce a number of new
measures to ensure speedier development of
Mineral Based Industries.
The Central Government identified Infrastructure
development as a key area to ignite growth.

18
Mines & Minerals Development
And Regulation Act-2015
Salient Features:
 All mineral concessions will be granted only through
auction.
 Direct auction for mining leases for bulk minerals; auction
of prospecting licences cum-mining leases for deep-seated
minerals.
 Uniform lease period of 50 years; no renewals; auction at
the end of lease period; will solve problems arising out of
SC judgments on second and subsequent renewals.
 Transition period of minimum 15 years for captive mines
and 5 years for other mines; no sudden stoppage as a result
of the Amendment.

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What Are The Impacts Of The
New Regulations ?
Positive Impacts:
 Lease for a 50 years period leading to better planning and optimization,
possibility of low cost green-field expansions
 Defined Royalty linked to the LME and exchange rates,
 As certain % of Royalty will plough back into the area for development,
the attitude of the community is likely to turn positive
 No free carry for the State.
Negative impacts:
 Landed cost of bauxite will increase as additionally a certain % of
Royalty would be payable for development of region and also for
development of mineral base in the country.

In spite of introduction of a new monetary contribution for

development of the area, any new refinery still is likely to be
highly cost competitive and is likely to be in the first quartile of
the cost curve.
20
 20
25
30
35
40
45
50
55
60
Parnassos
Boke
Linden
Weipa
Ayekoe
Trombetas*
Lospijiguaos
Aurukun
Ely
Gujarat
Pisolite Hills*
Tayan (Antam)
Ghana
Jabuti
Avl Alumina,%

Trelawny
Dak Nong*
Fria
Ngaoundal
R Silica,%

Sangaredi
Panchpatmali
Baphlimali
Gandhmardan
Bauxite Quality-Major Deposits

Sijlimali
Jarrela
Bauxite
Gibbsitic
Low Silica

Sapralla
Boddington
Alcoa Australia
0
1
2
3
4
5
6
7
8

21
Alumina Energy
Consumption GJ/t- 2014

Utkal Alumina: < 8.5 GJ/T

Vedanta: < 8.5 GJ/T

22
Alumina Cash Cost Curve

23
Planned Expansions-Greenfield
& Brownfield
Alumina Refinery Aluminium Smelter Brown field / Green Field
Owned By Location Name of Company Existing Existing Alumina Aluminium
Capacity MMTPA Capacity MMTPA Refinery Smelter
Govt of India Damanjodi, Orissa NALCO 2.275 0.460 1.000
Gujarat NALCO 1.000 0.350
Total 2.275 0.460 1.500 0.350

Alumina Refinery Aluminium Smelter Brown field / Green Field

Owned By Location Name of Company Existing Existing Alumina Aluminium
Capacity MMTPA Capacity MMTPA Refinery Smelter
Aditya Birla Belgaum, Karnataka Hindalco 0.380 - - -
Aditya Birla Muri Alumina Hindalco 0.500 - - -
Aditya Birla Renukoot Alumina, Uttar Pradesh Hindalco 0.700 0.350 - -
Aditya Birla Aditya Alumina & Aluminium Kansariguda - Odisha Aditya Alumina & Aluminium - 0.350 1.500 -
Aditya Birla Hirakud - Odisha Hindalco ( Hirakud Aluminium Phase II) - 0.100 - 0.500
Aditya Birla Utkal Alumina Project, Kashipur, Odisha Utkal Alumina Limited 1.500 - 1.500 -
Total 3.080 0.800 3.000 0.500

Alumina Refinery Aluminium Smelter Brown Field

Owned By Location Name of Company Existing Existing Alumina Aluminium
Capacity MMTPA Capacity MMTPA Refinery Smelter
Lanjigarh, Odisha Sesa Sterlite Limited Lanjigarh 1.000 - 4.000 -
Vedanta Jharsuguda - Odisha Sesa Sterlite Limited Jharsuguda - 0.500 - 1.100
Korba - Chatishgarh Balco - 0.245 - 0.325
Total 1.000 0.745 4.000 1.425

Alumina Refinery Aluminium

Existing Smelter
Existing Brown field / Green Field
Owned By Location Name of Company
Capacity MMTPA Capacity MMTPA
G.Koduru Village - Visakhapatnam,
JV Penna & RAK Andhra Pradesh Anrak Aluminnium Limited 1.500 0.000 1.500 0.500
L&T Kusumshila, Orissa RAYKAL Aluminium Limited 3.000 0.500
JSWL Visakhapatnam District 1.500 0.250
Total 1.500 0.000 6.000 1.250
Total Capacity of Alumina & Aluminium Smelter 7.855 2.005 15.050 3.525

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The India Story

Fourth Third Largest Fourth-largest Sixth-largest

Largest Steel Coal Producer iron ore bauxite
Producer • India has producer reserves
• Crude steel the fifth- • India ranks • India has
production largest coal fourth the sixth-
CAGR reserves in globally in largest
@6%,From the world at terms of bauxite
2008 to 60.6 billion iron ore reserves~3
2013 tonnes production. billion
tonnes of tonnes or 5
iron ore per cent of
world
deposits.

25
Advantage India

26
Conclusions
The CAGR of Aluminium demand in India is expected to be
around 7.5 %

To meet the aluminium demand India represents an ideal

opportunity for expansion of Alumina Industry- ideal bauxite
quality, low cost of production

Large bauxite reserves are still available

Recent initiatives by Government like contribution of a

defined % of Mining Royalty for development of mineral bearing
region is a positive move and likely to bring much needed
development of the mineral rich regions- a main demand of
the community.
27
IBAAS (International Bauxite, Alumina and Aluminium Society), CHALIECO and
SINR are jointly organizing a 3 day Symposium in SUZHOU, China from 25th
November 2015 with theme

“The Development and Future of Aluminium Industry in China -Reality and

Dream”.

The response of the Aluminium Industry has been very good and around 60
papers have already been received from all over the world.

Several leading Bauxite Mining Companies from India, Malaysia, Sierra Leone,
Guinea and some prospective companies from Ghana and Madagascar have
confirmed participation.

On behalf of IBAAS governing body, I extend an invitation to all of you to

participate in the Symposium.

For details kindly visit www.ibaas.info

Contact: info@ibaas.info
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Thank You

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