AgenciesE-auctions have brought a lot of transparency into the mining sector, says TK Chand, CMD, NALCO.

With China cutting aluminium production and short supply of it in EU and USA markets, the current prices of aluminium are likely to hold up, TK Chand, CMD, NALCO, told ET Now in an interview.

Edited Excepts:

ET Now: NALCO has been one of the largest aluminium operators in Asia. What would you say were the highlights of NALCO’s journey especially in the last four to five years?

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TK Chand: We have been implementing a new business model. As you know in NALCO there are two major revenue segments – one is alumina, another is aluminium. Traditionally NALCO is very strong arm in alumina segment. We are strengthening it by putting a new refinery of one million tonne due to which our production, in two to three years, will move from 2.2 million tonne to 3.2 million tonnes. As far as aluminium segment is concerned, there we wanted to reduce the cost of production. There also we are going for a brown field expansion which will give us cost advantage and it will be around five to seven lakh tonne that will move from the existing 4.6 to 1 plus million tonne. And in upward stream, we are now concentrating on some of the critical raw materials like caustic soda, CT pitch, etc, where we are entering into joint ventures with Gujarat Alkalies we have entered into a joint venture to make caustic soda production so that 50% our requirement can meet from there. Also in case of CT pitch, we have entered into a joint venture with NINL and there also we are trying to secure the raw material.

ET Now: How would you view the Indian mining environment currently and would you say that it is conducive right now to do the business?

TK Chand: Mining assets, which were earlier not done in a systematic manner, is being done through e-auctions currently. So mining assets are available in a transparent and a fair way. That brings certainty in the market. Also exploration fund has been created so that many of the mines potential can be judged. The GSI survey data has been put in the public domain. All these factors are adding certainty and also transparency in the mining environment and I hope that it will definitely increase business in the mining area.

ET Now: Aluminium prices, can they stay above $2000?

TK Chand: Right now aluminium prices are in an uptick. Input prices of caustic soda and ore prices have gone up which is holding up aluminium prices. China is cutting productions that has driven aluminium market sentiment. There has been reports of short supply of aluminium in American market as well as in European market. All these factors are combining to drive the aluminium prices high. We expect that because there is an input push, the cost push factor is there so aluminium prices will hold. And there are some risks to this aluminium prices. One risk is that if some of the idle capacity which are lying in China will start producing or the promise that they are making that they will cutting down on account of pollution as well as coming of the winter, if that does not go well there will be a risk to the aluminium price but right now aluminium prices are on move because of the market sentiment and the cost push factor.