Its original plan to build a site in Jharsuguda district ran into problems due to environmental reasons. The fate of the project, even at the new location, hinges on water availability.

The company has written to the state government to construct a barrage on a seasonal tributary of the Ib river to store water for use in the project.

Though the company proposed to build a 500kt/y smelter and a 1260MW captive power plant (CPP), sources said, the final project size will depend on the amount of water allotted to it.

The project will require about 1200 acres of land at the new location which is about 200km from the earlier site in Jharsuguda.

Nalco was crowded out of Jharsuguda, which has received three other aluminium smelter proposals from Vedanta, Hindalco and L&T Dubal, on environment pollution grounds.

The Orissa state government capped total aluminium capacity for the region at 2Mt/y. This sealed the fate of Nalco’s Jharsuguda plan as Vedanta Aluminium, Hindalco and L&T Dubal, had already received approval for 1.6Mt, 360kt and 300kt capacities respectively.

This took the aggregate aluminium output for the region past 2Mt and forced Nalco to look elsewhere.