State-owned National Aluminium Company Ltd (NALCO) is considering a 0.5 million tonne per annum aluminium smelter in Andhra Pradesh, a project that could help the company convert its expanded alumina capacity into finished aluminium rather than exporting the raw material.
NALCO chairman and managing director B P Singh said the company was in discussions with the Andhra Pradesh government over land for the proposed facility. The project has not yet been formally announced, and the location remains undecided. Singh said the proposal would be announced once land availability is established.
The proposed smelter is intended to support NALCO’s plan to use its entire expanded alumina capacity for its own aluminium production. The company currently has alumina production capacity of 2.1 million tonnes per annum. This is expected to increase to 3.1 million tonnes after its new refinery is commissioned by financial year 2028.
NALCO currently exports about 0.13 million tonnes of alumina. Singh said the company’s stated objective, in line with the Ministry of Mines’ vision, is to produce value-added aluminium from the expanded capacity instead of continuing to export alumina. NALCO is targeting total aluminium production capacity of about 1.5 million tonnes.
The Andhra Pradesh proposal would be a major addition to the company’s existing production network. NALCO’s current aluminium smelter capacity is 0.46 million tonnes per annum. The company is also preparing a 0.5 million tonne per annum brownfield expansion at Angul in Odisha, after signing a technology licensing agreement with the UAE-based Emirates Global Aluminium in September for its DX+ Ultra smelting technology.
The proposed Andhra Pradesh project would require substantial supporting infrastructure. Singh said a 0.5 million tonne smelter would require an investment of about ₹18,000 crore. The power requirement would be around 1,000 megawatts, with the associated power infrastructure estimated to cost another ₹11,000 crore. Together, the smelter and power requirement indicate a potential outlay of approximately ₹29,000 crore, although NALCO has not finalised the project or its financing details.
The project would also be separate from NALCO’s existing capital expenditure plan of ₹25,000 crore through 2031. Singh said the Andhra Pradesh smelter would be over and above that outlay, making land identification and power availability key early requirements for the proposal.
The company’s comments came on the sidelines of a roadshow for the Angul Aluminium industrial park. NALCO has also engaged a consultant to prepare a product strategy covering aerospace and other specialised applications. The strategy is expected to examine how the company can expand its presence in higher-value aluminium products.
For Andhra Pradesh, the proposal now remains at the discussion stage. The next formal milestone will be the identification of suitable land in consultation with the state government, after which NALCO is expected to announce further details about the project.
