Balco, a part of Anil Agarwal-led Vedanta Limited, on 14 September has begun the the to shut down its rolling business in Chhattisgarh—a move that will throw 1,000 people out of jobs.
Last month, it announced its decision to shut down the Sheet Rolling Division and Foundry at Korba (Chhattisgarh) on account of excessive dumping from China, besides fall in prices of the metal. Balco has also informed the secretary, labour ministry, Government of Chhattisgarh as well as the BSE and NSE. .
It may be noted that Vedanta, a mining corporation, holds 51% stake in Bharat Aluminium Company (Balco), while the government holds the rest of the state.
After seeking permission from the Union government, Balco will close down the mill as per provisions of the Industrial Disputes Act, 1947.
The shutdown of the rolling division is also a part of a restructuring exercise by Balco. CEO Ramesh Nair said, “The mill’s closure is following a crash in in aluminium prices and the cost of coal.”
“Though worldwide there has been a fall in energy cost but for Balco, the absence of linkage coal and regulatory issue for starting our coal mines is making operations economically unviable.”
“The coal auctions have benefited the company in terms of allocation, the new block will meet only 10 per cent of the peak capacity,” Nair said.
In India, cheap aluminium from China and Middle-East has shrunk market share of domestic producers who are already struggling with rise in input cost.
Around 55% of domestic aluminium consumption is met through imports.
IT;s current coal requirement of 15,000 tonnes to operate its power plants is being met partly by auctioned coal and partly by imports, it added.
The Chotia Coal Mines, which the company bagged in the recent auction, are yet to be operational due to pending government clearances. The new 1,200 MW Power Project, which was given clearance recently, is also struggling due to paucity of coal.
On aluminium front, lack of local bauxite and dependency on imported costly raw material is making the company’s produce non-competitive in the market, said Balco.