NALCO Approves ₹30,000 Crore Expansion Plan.

State-owned National Aluminium Company (NALCO) has finalized an ambitious ₹30,000-crore expansion plan, marking its first major capital expenditure in recent years. The expansion, set to be completed by FY30, includes a ₹17,000-crore investment in a new aluminium smelter and significant projects in mining and downstream product manufacturing. Global mining giant Rio Tinto Canada has been onboarded as a technology partner for the initiative.

To finance the large-scale capex, NALCO, a debt-free CPSE, will need to raise funds, targeting a debt-equity ratio of 70:30, according to sources. Additionally, ₹13,000 crore will be allocated for a joint venture with NTPC to secure 1,200 MW of captive power, with 25-30% coming from renewable energy sources.

Chairman and Managing Director Brijendra Pratap Singh stated that plans have received necessary approvals, with Engineers India Ltd (EIL) preparing the framework. The smelter, with a proposed capacity of 0.5 million tonnes per annum (mtpa), is expected to be operational by FY30, with initial investments beginning in FY27 and peak spending occurring between FY28 and FY30.

For power needs, NALCO is in discussions with NTPC regarding funding contributions for the ₹13,000-crore power plant, with potential revisions in investment figures. In the interim, the company is evaluating additional casting facilities for aluminium production.

In the mining segment, NALCO continues its alumina refinery expansion, with ₹2,000 crore earmarked for capital expenditure in FY25. This includes ₹1,700 crore for a fifth-stream alumina refinery expansion, which is 70% complete and expected to be commissioned by December 2024, targeting an output of 700-800 kt in FY27.

Analysts at Motilal Oswal noted that while NALCO’s aggressive expansion could significantly boost production capacity, execution risks, cost escalations, and regulatory challenges remain key concerns. Despite a positive long-term demand outlook for aluminium in India, near-term market fluctuations and production constraints could impact earnings.

HBL