Hindalco Industries and the Essar Group have entered into a joint venture to develop a greenfield aluminium project in Madhya Pradesh, according to unconfirmed reports.

The two companies will invest Rs.7,700 crore in setting up a 3.25 lakh tpa aluminium smelter, coal mining facilities of 3.5 million tonnes per year and a 750 MW power plant.

The formal MoU between the joint venture and the Madhya Pradesh government is likely to be signed on 4 April 2006, according to reports.

The financial closure for the project has already been reached. While Rs.3,080 crore would come as equity, Rs.4,620 crore would be raised through borrowings. The project is likely to be commissioned in four phases by 2009. Around Rs.4,450 crore would be invested the aluminium smelter, while Rs.600 crore and Rs.2,650 crore would be deployed in the coal mining unit and the power plant, respectively.

The smelter will come up on 5,000 acres of land in Orgari near Bargawan village of Siddhi district. Utkal Alumina -- a joint venture between Hindalco Industries and Alcan of Canada -- will supply alumina. The Utkal Alumina project is scheduled for completion within the next three years.

Also See:

Hindalco proposes mega aluminium smelter in Orissa (09-Apr-06)

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