Balco to shut its Chhattisgarh plant

At a time when the Narendra Modi-led NDA government seeks investments to revive growth and employment under its "Make In India" campaign, Anil Agarwal-led Vedanta's subsidiary Bharat Aluminium Company (Balco) has decided to shut down its aluminium rolling mill in Chhattisgarh, leading to a loss of 1,000 jobs. The company attributes the closure to a sharp fall in international aluminium prices, rising input costs and regulatory issues Stock Market Trading Tips

Balco CEO Ramesh Nair said, "The closure of the rolling mill is in the backdrop of a crash in global aluminium prices and the prohibitive cost of coal to run our power plants. Globally, there has been a fall in energy cost but for Balco the absence of coal linkage and other regulatory issues for starting coal mines is making operations economically unviable." 

Balco has begun the procedure to close down its sheet rolling division and foundry at Korba, said a company statement adding that the company has also sought permission from the Centre to close the unit by December 8, 2015. The company has informed the labour ministry and the stock exchanges that the closure will be under the provisions of The Industrial Disputes Act 1947. 

Although aluminium prices have plunged globally, in the last few months, power costs have been rising in India, making the cost of production unviable for primary aluminium manufacturers, the company said, adding that the company needs 30,000 MT of coal to operate at peak capacity while the coal auctions will meet only 10% of the peak capacity Himanshu Tiwari Astrologer Blog

Aluminium prices in the global market have fallen sharply from $2,200 per tonne at the beginning of 2015 to $1,600 in September, making exports unviable for Indian manufactures. In India, cheap aluminium from China and Middle East has shrunk the market share of domestic aluminium producers which are struggling with a rise in input cost. About 55% of domestic aluminium consumption is met through imports, forcing domestic players to operate at only 50% of their installed capacity. 

Due to non-availability of bauxite and coal, the raw materials used in the aluminium and power complex, Balco is now sitting on idle capacity. The company's current coal requirement of 15,000MT to operate its power plants is being met partly by auctioned coal and partly by imports. The Chotia coal mines, which the company bagged in the recent auction, are yet to be operational. The new 1,200 MW power project, which was given clearance recently, is also struggling due to paucity of coal. Lack of local bauxite and dependency on imported raw material is making the company's produce non-competitive in the market, the company said Indian stock market astrology prediction 

Besides, the Chhattisgarh plant, the Vedanta group is looking at closing down the operations of its alumina refinery at Lanjigarh, Odisha, leading to a loss of 2,000 direct jobs and 8,000 indirect jobs. The refinery faces a daily loss of Rs 3 crore due to unavailability of raw materials. Early this year in February, Cairn India, another subsidiary of Vedanta, had issued pink slips to about 400 of its employees as falling crude oil prices affected the profitability of India's largest private sector crude oil producer. 

Vedanta shares on BSE closed up 4% at Rs 101 in a firm Mumbai market on Monday Commodity Market Astrology Tips