Study finds high-end aluminium alloy project in AP commercially unviable: Nalco report

A Nalco-MIDHANI joint venture to build a 60,000 TPA high-end aluminium alloy plant in Nellore, Andhra Pradesh, has been deemed commercially unviable due to low demand and localisation levels. Ministries are reviewing closure despite land acquisition and earlier investment plans

New Delhi: A proposed high-end aluminium alloy project in Andhra Pradesh, jointly developed by Nalco and defence PSU Mishra Dhatu Nigam Ltd, has been found commercially unviable, according to a report.

The proposed project with a capacity of 60,000 tonnes per annum is not commercially viable due to a lack of demand, low per capita aluminium consumption in India and a lower level of aluminium localisation in sectors such as aerospace, defence, marine and automotive.

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Utkarsha Aluminium Dhatu Nigam Ltd, a 50:50 joint venture of National Aluminium Company Ltd (Nalco) and Mishra Dhatu Nigam Ltd (MIDHANI), was set up in August 2019 for the establishment of a high-end aluminium alloy plant for use in defence, aerospace and automobile sectors in order to reduce dependency on imports for such alloys and encourage Make in India.

“Latest market survey study for the proposed product mix and financial viability of the same was carried out. According to the study, the proposed project with a capacity of 60,000 TPA is not commercially viable,” Nalco said in its latest annual report for 2024-25.

Both the administrative ministries of mines and defence have reviewed the present project scenarios and further way forward for closure of the project was discussed, and the final decision in this regard shall be finalised, it said.

MIDHANI, a PSU under the Defence Ministry, has one of the integrated facilities for production and supply of alloy materials with expertise in super alloys, titanium and titanium alloys and special steels, among others, contributing to the self-reliance of critical materials for strategic and critical infrastructure applications.

MIDHANI, along with ISRO, had earlier developed aluminium-lithium alloy for space applications. With inherent capabilities, MIHDANI was looking for collaboration for the manufacture of aluminium alloy materials for strategic applications.

Earlier applications were invited for engaging consultants to undertake engineering, procurement and construction management services including selection of technology provider for the proposed facility.

The tender said that the initial capacity of the plant is intended to be 60,000 TPA of flat rolled products with a provision to diversify in future covering other products as per country’s needs.

About 110 acres of land has already been acquired in Nellore, Andhra Pradesh, for the proposed facility, it had said.

National Aluminium Company Ltd, under the Mines Ministry, operates 0.46 million tonnes per annum aluminium smelter, a 1,200 mw captive power plant and four million tonnes per annum Utkal D&E coal mines at Angul, Odisha.