Rio Tinto is planning a comeback to India after a decade-long absence, forging a joint venture with AM Green to establish a 1 million tonne aluminium smelter and 2 million tonnes of alumina production facility.
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Rio Tinto is planning a comeback to India, close to a decade after the world’s second-largest miner exited the country, through a joint venture with AM Green, a company backed by Greenko Group’s founders, said people in the know.
The plan is to set up a 1 million tonne per annum aluminium smelter along with 2 million tonnes of alumina production, powered by clean energy sources, the people said. To begin with, both parties will be signing a memorandum of understanding to initiate a feasibility study. A formal announcement is expected this week. In India, Kumar Mangalam Birla’s Hindalco, Vedanta and state-owned NALCO are the dominant players in the sector.
The first phase of the greenfield venture, expected by 2030, will be targeting 500,000 tonnes per annum of primary aluminium smelting at a port location in South India.
Recyclable Qualities
The entire project will be fired by 1.8-2.0 GW of solar and wind power backed by 24×7 pumped hydro storage. This would translate to 7-8 GW of solar and wind capacity, said industry executives.Aluminium is a recyclable metal that is lighter and more malleable metal compared to steel. Because of its energy efficiency and recyclable qualities, it has seen increased industrial usage in recent times across a diverse set of industries like automobiles, power, transportation, building, construction and packaging. Global demand for the metal has reached around 70 million tonnes. Industry players estimate a project of this scale would need a capital expenditure of $5-7 billion, in phases. The principal cost, said analysts, is in power. Traditionally coal-based smelters have been firing up these ventures, although, of late, most players have been looking to pivot to greener energy alternatives. Vedanta Aluminium, the country’s biggest producer of the metal, has been planning to increase the share of renewable energy it is using to 30% by 2030 from nearly 5% in 2024.Bauxite importer
India is the second-largest producer of aluminium in the world, with a capacity exceeding 4 million tonnes. Even the domestic bauxite mining has seen significant growth in the non-ferrous segment, with production touching 23.93 MTPA in FY24, as per data from the ministry of mines. Despite having abundant resources of bauxite, India is one of the largest importers of the raw material. Bauxite is used to produce alumina, which is then used in the production of aluminium. However, the plan is to import bauxite for the smelting and refinery from Rio Tinto’s mining sources in Australia. “The whole objective is to set up capacity for domestic consumption which has seen an uptick and also explore exports of low carbon aluminium to EU countries,” said an executive in the know on the condition of anonymity, as the talks are still in private domain.