Solar targets to triple aluminium demand
The green-energy transition is poised to nearly triple India's consumption of aluminium by the end of the decade, according to an industry group.
India, home to some of the most polluted cities on the planet, has pledged to zero out emissions by 2070. Decarbonisation will drive demand for aluminiumintensive solar power infrastructure, and higher use of the metal in other industries, pushing up consumption to 10 million tonnes a year by 2030, according to the Aluminium Association of India.
Aluminium producers in India will need to invest billions of dollars to expand capacity from the current level of 4.1 million tonnes, it said. Producers are seeking higher import barriers and a steady supply of coal to protect that investment.
"It is very capital intensive and requires a great foundation of cost effectiveness as well as market access," Rahul Sharma, president of the industry body, said in an interview.
Imports comprised nearly 60 per cent of domestic consumption last financial year, hurting the market share of local producers, said Sharma, who also heads Vedanta Ltd's aluminium business. Imports have more than doubled in the past decade, peaking at 2.3 million tonnes in 2018. Shipments have largely held steady around that level despite the pandemic disruptions.
The energy-intensive industry is also looking for more secure supplies of coal after stockpiles of the fuel plummeted to critical levels last year, following an energy crunch in the country.
Aluminium mills consume about two-thirds of the coal needed by the nonpower sector and the fuel accounts for 40 per cent of the cost of production, he said.
The government has to take a stock of this, and treat coal supplies to aluminium plants at par with the captive power sector, he said.