Kutch Alumina plant raises eyebrow

Orissa set an example for other states to imitate it and walk on the similar path for industrial development. Though, Gujarat has already moved steps ahead in industrial development still there are lots of mineral resources that yet to be exploited.
The Gujarat government which had called for expressions of interest to set up an alumina refinery has a tough task at hand as both the players have roped in reputed joint venture partners for the proposed project.

Holding back the decision
Although the government of Gujarat has been holding back the decision to award the mandate since the past year and a half, the committee constituted to recommend the agency which would implement the project has favoured the Man Group and Aluchem (US) JV for the project.
The other serious players in the fray, Ashapura Industries, which is one of the largest industrial mineral exporters has inked a JV with Siechuan Electric Power Corporation (SEPC) one of China’s largest power utilities which also operates an aluminium smelter. The Chinese JV has also agreed to buy out the entire production from the refinery, if it materialises.
Gujarat Industries secretary D Rajgopalan is understood to have said that the government is yet to take a decision on awarding the project to any of the two players.
The committee constituted to recommend a suitable agency includes the industries secretary of Gujarat D Rajagopalan, Gujarat Mineral Development Corporation chairman and managing director, Sudha Anchlia principal secretary, expenditure, AK Joti, GIDB CEO, Jayant Piramal and RN Goyal a technical expert from Jawaharlal Nehru Aluminium Research Development and Design Centre, Nagpur.

Leverages
The committee of experts in their report has stated. The technology for special alumina based chemicals is a guarded one and such products will be produced in the country for the first time. Hence, the proposal of Aluchem and Man group has leverage over the proposal of Ashapura Minechem.
Man Industries which is a leading manufacturer of spiral arc welded pipes has established a 50:50 JV with Aluchem of US and proposed to implement a one million tonne alumina refinery and speciality chemicals project in two phases.
However, Ashapura Minechem and SEPC’s confidence that it would bag the project stems from the fact that they already have an offtake agreement and long years of experience in the alumina business, Ashapura also has leases for bauxite mining in Jamnagar with resources of around 25m tonnes, which makes it versatile.
However the balance is still in favour of the Man group as the committee has said that special alumina chemicals which the Man-Aluchem JV proposes to manufacture are high value items. Ashapura, however, even with its buy-back arrangement will have to base the pricing on LME aluminium price which has a history of wide fluctuations.
The committee further states. Since the prices of alumina based products, proposed to be manufactured by Aluchem, are higher and stable, the marketing of products will not only be easier but also have a higher realisation.
On the other hand, the entire production by Ashapura will be exposed to fluctuations in prices.
From this point of view, simply having a buy-back agreement is not necessarily an advantage. On the contrary, it will be an advantage to produce increasing proportions of special alumina products, as proposed by Aluchem, for which the prices are stable. The two bidders have already completed their pre-feasibility studies for the project, while Global Procurement Consultants, a subsidiary of Exim Bank of India completed the pre-feasibility studies for Man Industries, Micon did the same for Ashapura Industries.

Mineral resources in Gujarat
Natural Resources play an important role in industrial development. Large numbers of industries are set up by harnessing the natural resources of a region. The natural resources include minerals, marine, agriculture, forest, animal wealth and human resources. Gujarat is endowed with important resources like minerals, marine, agriculture; besides animal and human resources. The state government has taken several measures to explore and exploit these resources for industrial development.
The important mineral resources in Gujarat include limestone, lignite, bauxite, bentonite, chalk, china clay, dolomite, marble and granite; besides oil and natural gas. Information on reserves and location of the important minerals is as under.
There has been impressive development of industries based on mineral resources. Limestone is an important mineral used in the production of cement and soda ash. There are five projects in Gujarat with a capacity of 18,23,334 Million Tonnes per annum production of soda ash and 70,54,532 projects with a capacity of 10,084 Million Tonnes per annum production of cement. There is a good reserve of limestone in Kachchh district, which offers potential for setting up new projects.
Bauxite is another important mineral which has potential for setting up high refractory bricks and high alumina plants.
China clay plays an important role as main raw material for ceramic industry. Gujarat has emerged as an important location for ceramic industry because of availability of good quality china clay and other related minerals besides natural gas.
Marble and granite have been exploited effectively for development of marble cutting and polishing industry. Ambaji has emerged as an important cluster for marble polishing industry. There are a number of industrial units in the state using other minerals like dolomite, bentonite, chalk, etc.

Conclusion
Though the state government has already shown its generosity in framing investor-friendly industrial policy and a large number of industrialists have been attracted towards the state. The state also enjoys geographical advantages still a lot is yet to be done for which most of investors, perhaps, are waiting to pump in huge money in the state.