‘We will focus only on green energy, stay away from coal mine bidding’

We expect the demand to remain strong in India. We want to get through this monsoon without any disruptions on coal supply. If the cost of production is under control, we should have another good year. The Indian economy is doing well and the demand for metals, aluminium and copper is picking up. In the upstream business, power and coal costs are important. There seems to be an adequate coal supply right now. This will keep our costs under control. If the commodity prices continue the way they are, we should have a good FY25.

With no more plans on repayment, we will be spending the entire ₹6,000 crore capex on growth. We have ongoing projects of an alumina refinery, aluminium flat rolled product expansion, aluminium battery foil and copper recycling plants. We have to complete the FRP expansion project at Sambalpur in Odisha this year. We have ordered the equipment for the batter foil plant and it should go on stream in about a year. We are already making battery foil from our mother plant and getting it qualified. The entire capex will be funded through internal accruals. We have over ₹11,000 crore in reserve.

We won coal mines at Chakala in Jharkhand and Meenakshi West in Odisha. We should be doing the box cut (a small open cut built to supply a secure and safe entrance to an underground mine) in end of Q2 next year. Meenakshi West is an exploration block. We will do all the exploration required next year and the box cut the year later. On the critical mines, we have won copper mine which is in exploration stage. We are in the process of bidding for two nickel-cobalt mines in Maharashtra and Karnataka.

About 6 per cent of our coal requirement are from captive sourcing. We buy about 50 per cent through linkage and the rest through e-auction. The availability of coal this summer was quite adequate despite huge demand from power producers. We are not going to bid for any more coal mines. Any further expansion will be only through green energy and not based on coal. We will not increase usage of coal beyond the current level.

Chinese imports into India continue to be a source of concern. There are various measures that the government is taking including anti-dumping on foil from China. There is already duty on rolled products from China. Various tariffs imposed recently will keep imports under control. China rapidly expanded its custom copper smelter capacity to meet its own demand since it was a net importer compared to most other metals. However, no new copper mines have come on streamm, so there is a tightness in the concentrate supply. And people of course project copper demand to be very strong going forward. That’s why copper prices have jumped to over $10,000 a tonne.

In June quarter of FY24 it was slightly lower and started picking up thereafter. The industry sells over 1.2 million tonnes(mt) a quarter. This used to be about one mt just a year ago. Overall, we believe the consumption should grow to 5 mtpa from about 4 mtpa. There may be a little bit of an aberration in a particular quarter. Going the demand in April and May, India is going to consume about 5 mt of aluminium this year.

Cost remains elevated for shipments to Europe, but the rates to Asian countries where most of our exports go it is quite normal. Rates to Europe are still on the higher side because of the Red Sea problem. I think till the Middle East and Red sea problems are resolved, rates to Europe are going to be higher. Incidentally, aluminium scrap imports in March quarter dropped very sharply due to high shipping rates. India imports all the scrap from Europe. We have to see how it pans out in June quarter this year because when the LME goes up the scrap again becomes very attractive.

The logistics cost in India will come down with more infrastructure spending by the government. More dedicated freight corridors are being put in place. The biggest achievement for us will be to shift transportation from road to rail.