Vedanta to invest Rs 6,611 crore on Balco's smelter capacity expansion

Anil Agarwal-led Ltd has planned an expansion at Bharat Aluminium Company’s (Balco) smelter capacity with an investment of Rs 6,611 crore over the next 18-24 months.

“Balco’s expansion is a very important project for us…Post this expansion, Vedanta’s aluminium capacity will increase to 2.8 million tonnes,” Vedanta’s Group CEO Sunil Duggal said.

Balco’s smelter capacity, as a result, will increase by 414 KTPA, taking its total capacity to close to 1 million tonnes. With this fresh investment, Balco’s value-added products portfolio will increase to 92%.

In addition, the carbon plant adequacy business at Jharsuguda will set up a new carbon facility at a cost of Rs 635 crore.

Balco had a capacity of 2,50,000 tonne in 2012 after which an expansion was announced taking the company’s capacity to 5,75,000 tonnes. This expansion comes after 10 years and will take the company’s capacity to around 1 million tonnes.

Earlier in February this year, Vedanta’s Board of Directors approved the expansion of Lanjigarh Alumina Refinery to 5 million tonnes per annum (mtpa) from the present level of 2 mtpa at a cost of Rs 3,780 crore.

“Completion of this project will place Lanjigarh Alumina Refinery as one of the world’s largest single-location alumina refinery complex,” Vedanta said in a media statement.

Vedanta’s Duggal said that the company is focused on reducing its cost of production by nearly $300 per tonne to around $1200 in the next two years.

“This will help improve the realization and profitability from the aluminum business significantly,” he added.

Vedanta’s aluminium business posted a strong momentum during the first quarter of FY 2021-22 with highest-ever production of 549 KT, and margin of 36%. Vedanta on Monday announced a 79% increase in its consolidated revenues to Rs 28,105 crore in Q1 FY2022.

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The company clocked an Ebitda (Earnings before interest, taxes, depreciation and amortization) of Rs 10,032 crore, which is 150% higher year-on-year. Attributable PAT (before exceptional items) was 314% higher at Rs 4,280 crore.

During the first quarter, the company reduced its debt by Rs 6,989 crore, while Net Debt/EBITDA ratio at 0.6x is the lowest in the past four years. The company’s cash and cash equivalents at the end of June 2021 was at Rs 31,318 crore.



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