INDIA BUSINESS WORLD - JULY - AUGUST - 2007
The Month that was ...

HINDALCO BUYS ALCAN OUT OF UTKAL ALUMINA

ADITYA Birla Group flagship Hindalco Industries has completed its bid to own Utkal Alumina, a joint venture it had with Alcan, when it agreed to buy out the Canadian company's 45% equity stake in the venture for an undisclosed amount.

The acquisition will give Hindalco ownership of 195 million tonnes of high-grade bauxite, which is a key raw material for making aluminium metal.

Although Hindalco officials declined to specify the amount they will spend to buy Alcan's stake, it has been learnt that a 1.5-million-tonne alumina plant will cost Rs 5,000 crore to build. The ownership of high-grade bauxite will help Birlas feed their greenfield aluminium projects. Once all its projects are completed, the group will have ownership of about 5.2 million tonnes of alumina.

Alcan, at present the target of a friendly $38-billion takeover offer from British mining major Rio Tinto, had announced its plan to exit the JV in April. Hindalco held the remaining 55% stake and the right of first refusal for its partner's stake. "Hindalco and Alcan will continue to have a cordial business association given that Alcan has ongoing contracts with Novelis," said Hindalco.