Financial Daily from THE HINDU group of publications
Thursday, Aug 12, 2004
Financial Daily from THE HINDU group of publications Thursday, Aug 12, 2004 |
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Corporate
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Alliances & Joint Ventures Ashapura Minechem, Chinese aluminium co form joint venture Our Bureau
Mumbai , Aug. 11 IN a bid to capture the growing demand for alumina in China, Ashapura Minechem and Sichuan Aostar Aluminium Corporation of China have come together to set up a 50:50 joint venture company to produce one million tonne alumina. The projected investment for the alumina refinery to be executed in two phases will be Rs 2,500 crore. The project's first phase, estimated to cost Rs 1,270 crore, will produce 0.5 million tonne alumina. TheRs 1,270 crore investment in the first phase will comprise an equity portion of Rs 340 crore to be shared equally by the two partners. The rest will comprise debt, most of which will come from China, Mr Chetan Shah, Managing Director, Ashapura Minechem, said. China's Exim Bank as well as China Export Credit Insurance have evinced interest in offering debt to the project, said Mr Michael Shus Shi, Senior Advisor, Sichuan Aostar. The refinery is expected to come up in the Kutch district of Gujarat and the project is expected to commence in the first quarter of 2005. About 75 per cent of the alumina produced at this refinery will be bought by Sichuan Aostar for conversion to aluminium; the rest will be exported. "There are a number of smelters in the West Asian region. We will be able to supply alumina to these smelters," Mr Shah said. Sichuan Aostar, a wholly owned subsidiary of Sichuan Electric Power, has an aluminium smelter capacity of 2.5 lakh tonnes per annum. There is a plan to increase this capacity to 4.5 lakh tonnes by the end of the next year. Therefore, the alumina requirement for the project would be one million tonnes at fully capacity, thereby necessitating the setting up of an alumina refinery. Ashapura Minechem is also in talks with the Gujarat Government to offer a nominal 7 per cent stake to Gujarat Mineral Development Corporation, a State Government entity. This stake will be offered from Ashapura's 50 per cent holding in the joint venture, he said. A similar offer is also likely to be made by the Chinese partner to Guiyang Aluminium & Magnesium Institute by Sichuan Aostar. The project also envisages setting up of a lignite-based power plant and a desalination plant for the refinery. Power requirement for the full capacity of one million tonnes has been estimated at 40 MW.
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