Adani, Abu Dhabi's IHC plan $11.5bn aluminium project in Odisha

NEW DELHI: India’s Adani Group and Abu Dhabi-based International Holding Company are planning to invest $11.5 billion in an aluminium venture in the eastern Indian state of Odisha, the Indian conglomerate said on Thursday.

According to an Adani statement, the two sides signed a memorandum of understanding with the Odisha government for what it described as India’s largest foreign direct investment in the metallurgy sector. The statement said Adani Enterprises Limited and a subsidiary of IHC will establish a 50/50 joint venture for the proposed project.

The planned complex will include a refinery with annual capacity of four million metric tonnes of aluminium, a smaller aluminium smelter and a 4,000-megawatt captive power plant. At the signing ceremony, an official said the investment is expected to generate 53,500 jobs, including 35,000 during the construction phase and 18,500 after the start of operations.

Odisha contains some of India’s biggest bauxite reserves, a key raw material for aluminium production, and accounts for 54 per cent of the country’s aluminium output. The investment comes as India seeks to expand domestic aluminium production to meet rising demand from infrastructure, power, transport and renewable energy sectors, while cutting reliance on imports of value-added metal products.

Although India is the world’s second-largest aluminium producer, it still imports material to meet demand from local industries. Last year, Indian policymakers announced a strategy aimed at increasing domestic output six-fold by 2047 and doubling the country’s aluminium recycling rate.

In a statement, IHC chief executive Syed Basar Shueb said the company sees the project as part of a broader industrial growth strategy.

“This partnership with Adani Enterprises reflects that strategy and our shared ambition to develop a world-class integrated aluminium project that creates lasting economic value”, he added.

India and the United Arab Emirates also signed a wider trade and investment agreement four years ago that is intended to eventually remove tariffs on all bilateral goods and raise annual trade between the two countries to $100 billion within five years.