In a bid to protect the bottom line from the fluctuating price movement of the metal in the international market, companies including National Aluminium Company (NALCO) and Vedanta Aluminium are set to emerge as independent power producers.
This will also help them get cheap power, whose rising prices are putting pressure on the manufacturing cost of the metal.
Aluminium prices have witnessed major swings in the past three years. At the peak of global economic activity, prices of the metal had reached an all time high of $3400/t in 2008 which dropped 47% to $1800/t in August 2009.
The metal is now hovering around $2400/t, up 30% from the price in August 2009.
Nalco is one of the bidders of a proposed 4000MW power plant (UMPP) in Orissa. The company is also planning an independent power project in Orissa in collaboration with one of the state power agencies along with wind mill projects.
Vedanta Aluminium, based in India, has also entered into the power production segment setting up a 2400MW independent power plant at Jharsuguda in Orissa with the first unit of 600MW recently commencing operation.