Bauxite deposits in India have suddenly caught the imagination of global aluminium majors. With Chinese aluminium major Chinalco along with two other companies announcing their plans to invest 17.5 billion rupees in setting up an alumina project and captive power plant, the race has indeed intensified The plant is supposed to be a joint venture with Kutch Alumina Power & Coke. Experts say that China is a cost effective base for manufacturing aluminium because power prices are low and power consists of 40 per cent of cost of metal. Now that 100 per cent foreign direct investment (FDI) is permitted in the metallurgical sector, the entry of Chinese manufacturers into India could change domestic market equations. Incidentally, the Chinese government has marked aluminium as a priority area and is also making aggressive investments, armed with a strong domestic demand and a per capita consumption of 2.7 kg. Commercially, if Chinese companies manufacture aluminium in India, it would mean further squeezing of margins in a market place where players are already cutting down on capacity utilisation, experts say.
NSTL
