Adani’s Aluminum Agenda

 

Context :

Now, Adani ventures into aluminium business   /  BL  /  19 Dec 2021

Extract :

Gautam Adani is expanding his sprawling empire by venturing into aluminium business that is dominated by the likes of Aditya Birla and Vedanta groups.

Adani Enterprises Ltd, the flagship company of the diversified Adani Group, has formed a wholly-owned unit named Mundra Aluminium Ltd to set up alumina refinery and aluminium smelter.

 

Adani Enterprises did not disclose details of its planned alumina refinery and aluminium smelter while announcing the formation of a subsidiary to pursue the aluminium business, in a filing to the stock exchange.

Over the past few years, the Adani Group has entered new businesses such as airports, roads, oil refining and petrochemicals, data centre, solar energy, warehousing, real estate, super app and logistics technology to add to its industry leading positions in ports, power, transmission, gas and edible oils.

Industry sources believe that by floating a subsidiary, Adani could be preparing the ground to participate in the bidding process for privatising state-owned National Aluminium Company Ltd, which is expected to be considered by the Cabinet soon.

Aluminium could be a standout metal next year, according to Think, the Economic and Financial Analysis arm of Dutch multinational investment and financial services firm ING.

Think has projected aluminium prices to average close to $3,000 a tonne next year.

In the long-term, FSCRIR said aluminium prices will remain high as the demand will be supported by acceleration in the shift to green economy.

Fitch Solutions has forecast aluminium production at 69.95 million tonnes (mt) next year compared with 67.6 mt this year, while utilisation is projected to increase to 63.99 mt from 62.36 mt this year.

 

 

MY  TAKE :

I envisage Adani’s Aluminium Agenda as follows :

 

[ A ]…….CAPACITY BUILDING

            As reported in above-mentioned news report, Adani could be eying

            NALCO

[ B ]……RAW MATERIAL AVAILABILITY

           Kutch holds 15 % of all-India bauxite reserves

[ C ]…..RE-VITALIZING IDLE ASSET

            #  Adani’s 4600 MW ( imported from Australia coal-based  ) power

                 project is totally lying idle for several years now – reason being :

                

     #  A few years back, Australia suddenly raised its export prices for coal.

          This pushed-up the cost of production for Adani’s power plant . Adani

          could not get power purchasing companies to agree  to  higher price.

          PPA got terminated and a long court battle ensued. For past few

          years, that plant is closed down. Conciliatory efforts by the Central

          Government has failed to resolve the deadlock

           

     #  Adani would re-start this plant which will mostly supply power to

         Adani Alu Project nearby

 

[ D ]……….CAPTIVE COAL SUPPLY

                After a long drawn struggle with environment groups in Australia,

                just a few weeks back, Adani has managed to start mining coal at

                its Australian Coal Mine

                 

                 Importing coal from its own coal mine in Australia, Adani could be

                 planning to re-start its  Mundra Power Plant.

                

[ E ]………POWER FOR SMELTING – REFINING

             Aluminium production is energy intensive. About 17,000 kWh of electricity are required to          produce 1 tonne of aluminium. This means that it has a relatively high cost 

 

[ F ] ………EXPORT

              Using its Mundra Port, Adani can export finished Aluminium to foreign

              countries , where demand is going up sharply and, as a consequence,

              prices are rising

 

              

[ G ]……….LOCATION

           This means, Adani will have, practically at a single location ( Mundra ) :

        #  Abundant supply of raw material ( bauxite )

        #  Abundant supply of cheap power

        #  Practically ZERO logistics cost for loading aluminium on a ship

 

[ H ]……….INTEGRATION ( FORWARD – BACKWARD )

 

               There is another opportunity , viz : exporting ALUMINA to OMAN for

               REFINING , since power is relatively cheap in MUSCAT

               

               Adani could load Alumina on a flat-bottom barge and tow it across to

              Muscat for converting into ALUMINIUM

              

               On return journey , that very same barge will bring back refined

               ALUMINIUM ( no idle trip ! )

 

        [ I ] ……….SELLING ALUMINIUM

                 #  Adani are betting big on RE-NEWABLE ENERGY

                 #  Not only they plan to manufacture PV Solar Panels but also

                     STORAGE BATTERIES 

                    ( both for  vehicles and for GRID-SCALE storage )

                      

                 #   And, as per some experts, ALUMINIUM-AIR batteries, are the

                      future of EV / GRID

 

 

References :

Tata, Adani Mundra power plants may get to sell electricity on power exchanges  /  ET  /  30 Aug 2021

Extract :

Projects on India’s western coast, including these two 4,000 MW plants run by 

Tata Power and Adani Power use imported coal, but are not operating now in the absence of compensation for high fuel cost, the official said.

Power prices at the day-ahead market of the Indian Energy Exchange have peaked at Rs 20 per unit, the upper limit on power exchanges, due to desperate buy by distribution utilities.

 
The average price is hovering around Rs 9 per unit against Rs 2.95 per unit in July.

Industry executives said Gujarat is buying the maximum — 4,000-5000 MW — from IEX, followed by Rajasthan, Punjab and Haryana.


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Adani Powers Mundra Plant Sets A Record In Power Generation

Mundra Power Plant, Gujarat

 

Gujarat agrees to buy Tata Mundra power at Rs 4.5 for a month  /  ET  /  13 Oct 2021

Bauxite Distribution in India – UPSC  /  13 May 2021

 

Extract :

• Gujarat is the second-largest producer and produces over 15 percent of the total bauxite of India.
• The most important deposits occur in a belt which is 48 km long and 3 to 4.5 km wide lying between the Gulf of Kachchh and the Arabian Sea through Bhavnagar, Junagadh, and Amreli districts.

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