Chapter-6

6.1 The Ministry of Mines has four 9001:2000 cert i f icat ion of qual i ty

public sector undertakings (PSUs) under management, registration of products at

its a d m i n i s t r a t i v e c o n t r o l . N a London Metal Exchange, environment care

t i o n a l A l u m i n i u m C o m p a conforming to ISO 14001, low cost

n y L i m i t e d (NALCO), Hindustan operations and international customer

Copper Limited (HCL) & Bharat Gold base, NALCO enjoys the status of a Star

Mines Limited (BGML), are in the Export House and a Miniratna company.

field of mining and mineral processing, 6.4 Apart from exporting to more than 30

and Mineral E x p l o r a t i o n C o r p o r countries worldwide, the company has

a t i o n L i m i t e d (MECL) is in the stockyards in various parts of India to

field of mineral exploration. In addition, facilitate domestic marketing. With its

the Government holds 49% equity in consistent track record in capacity

Bharat Aluminium Company Ltd. utilization, technology absorption, quality

(BALCO) and 29.54% equity in assurance, export performance and posting

Hindustan Zinc Limited (HZL). The of profits, NALCO is an example of India's

performance of these undertakings mature industrial capability.

during 2005-2006 is given below.

6.5 NALCO's 48 lakhs Tonnes Per Annum

(TPA) bauxite mining, on Panchpatmali

hills of Koraput district in Orissa, is among 6.2 Incorporated in 1981, National the most sophisticated and eco-friendly Aluminium Company Limited (NALCO) is mining operations to be found worldwide. Asia 's largest integrated alumina- Highly mechanized, this opencast mining aluminium complex, comprising bauxite features geostatistics application and mining, alumina refining, aluminium computerized mine planning. The smelting and casting, power generation, transportation of ore to the alumina rail and port facilities. refinary, located downhill, is done through

a 14.6 kms long, single-flight, multi-curve, 6.3 With the technical collaboration of cable belt conveyor system.Aluminium Pechiney of France, ISO

BAUXITE MINES( A ) N A T I O N A L A L U M I N I U M

COMPANY LIMITED (NALCO)

INTRODUCTION

Performance of Public Sector and Joint Sector Companies in Mining, Mineral Processing and Exploration

Perf

orm

ance

of

Public

Sect

or

and J

oin

t Sect

or

Com

panie

s

38

ALUMINA REFINERY

CAPTIVE POWER PLANT

PORT FACILITIES

ALUMINIUM SMELTER

merger of International Aluminium

Products Limited (IAPL), Rolled Products 6.6 One among the top ten alumina

Unit has the advantage of direct molten refineries in the world, this 15.75 lakhs

metal transfer from the smelter.TPA energy-efficient alumina refinery

utilizes time-tested Bayer process

technology of atmospheric pressure 6.8 The 960 MW Captive Thermal Power

d i g e s t i o n a t l o w t e m p e r a t u r e . Plant at Angul, close to the smelter and

Manufacturing of 26,000 TPA special grade near Talcher coalfields, is another

aluminas and hydrates as well as 10,000 showpiece in efficient and reliable power

TPA detergent grade zeolite are well generation. Besides supporting firm and

integrated with the main process streams. uninterrupted power supply to the smelter,

After meeting the consumption needs of the it is connected to the state grid for sale of

company's smelter, the balance quantity of surplus electricity.

alumina goes to international markets

through Visakhapatnam port.

6.9 NALCO has dedicated port facilities of

the inner harbour of Visakhapatnam Port 6.7 Located at Angul in Orissa, the 3.45

for bulk export of alumina and import of lakhs TPA smelter comprises three pot-

caustic soda lye. With storage facility up to lines with 240 electrolytic pot cells in each,

75,000 tonnes and ship-loading rate of 2200 along with integrated facilities for casting

tonnes per hour, this facility can reliably of ingots, sows, billets, strips and wire rods.

handle export of about one million tonnes With the acquisition and subsequent

of alumina per annum.

Perfo

rmance

of P

ublic S

ecto

r and Jo

int S

ecto

r Com

panie

s

Overview of NALCO'S port

Facilities at vizag port

Strip casting mill at smelter of NALCO

39

Perf

orm

ance

of

Public

Sect

or

and J

oin

t Sect

or

Com

panie

sPe

rform

ance

of

Public

Sect

or

and J

oin

t Sect

or

Com

panie

s

Financial Performance

6.11 The financial performance of the Company during the year 2003-04, 2004-05 and

2005-06 (upto December, 2005) is given in the Table 6.2

TABLE 6.2Financial Performance of NALCO

Physical Performance

6.10 The physical performance of the company during the year 2003-04, 2004-05 and

2005-06 (upto December, 2005) is given in the Table 6.1

TABLE 6.1Physical performance of NALCO

Actual Target

2004-05 2004-05 2005-06 2005-06

2003-04 (upto (upto

Dec.’04) Dec.’o5)

#

ProductSl.

No.Unit

PRODUCTION

1. Bauxite MT* 48,16,762 48,51,726 34,22,901 34,56,243 48,00,000

2. Alumina MT* 15,56,100 15,75,000 11,73,500 11,86,600 15,75,000

3. Aluminium MT* 2,98,208 3,38,483 2,48,498 2,69,081 3,45,000

4. Net Power MU** 5,122 5,613 4,248.5 4,129 5,601

(Generation)

Sl. Details Actual Target

No. 2003-04 2004-05 2004-05 2005-06 2005-06

(upto (upto

Dec.’04) Dec.’05)#

1. Income 3324.77 4374.60 3113.27 3488.08 4182.72

2. Operating Cost 1722.33 1985.01 1430.24 1714.68 1882.72

3. Interest etc. 103.41 60.61 49.61 - -

4. Depreciation 446.27 458.71 344.42 304.88 389.45

& Amortization

5. Net Profit before Tax 1052.76 1870.27 1289.00 1468.52 1910.55

& Dividend (PBT)

6. Net Profit after Tax 737.37 1234.84 800.60 968.44 1244.03

*but before Dividend

(PAT)

40

Perfo

rmance

of P

ublic S

ecto

r and Jo

int S

ecto

r Com

panie

s

Alumina/Hydrate Aluminium Domestic Aluminium

Sales Performance1100000

1000000

900000

800000

700000

600000

500000

400000

300000

200000

100000

0

In M

T

2003-2004 2004-2005

934874

129718

166650

2005-2006 (upto Dec. ‘05)#

663125

648787

81431

68222156230

194982

2004-2005(upto Dec. ‘04)

909081

205797

132730

Financial Performance

Income Net Profit (PAT)

3500

3000

2500

2000

1500

1000

500

0

Rs.

in

cro

re

2003-2004

737.3

7

3324.7

7

2004-2005(upto Dec. ‘04)

2004-2005

3113.2

7

3488.0

8

968.4

4

800.6

0

2005-2006(upto Dec. ‘05)#

1234.8

4

4374.6

2336.27

41

Perf

orm

ance

of

Public

Sect

or

and J

oin

t Sect

or

Com

panie

s

Items Unit Actual Target

2003-04 2004-05 2004-05 2005-06 2005-06

(upto (upto

Dec.’04) Dec.’05)#

(A) Export

i) Alumina/Hydrate MT 934874 909081 663125 648787 865000

ii) Aluminium MT 129718 132730 81431 68222 128000

iii) Total export Rs. 1717.38* 2200.25 1454.43** 1466.65 1998.73

Earning crores

(B) Domestic Sales of MT 129718 132730 81431 68222 128000

Aluminium

Table 6.3

Sales Performance of NALCO

st stUnit Original After 1 Phase After 1 Phase

Capacities Expansion Expansion (under

(Completed) implemen tatiomn

Bauxite Mine 24,00,000 MT 48,00,000 MT 63,00,000 MT

Alumina Refinery 8,00,000 MT 15,75,000 MT 21,00,000, MT

Aluminium Smelter 2,30,000 MT 3,45,000 MT 4,60,000 MT

Power Plant 600 MW 960 MW 1200 MW

Table 6.4

Capacity of Mines, Refinery, Smelter & CPP

42

Sales Performance

P O L L U T I O N C O N T R O L A N D

ENVIRONMENT.

On-Going Projects :

Expansion

?

?

Energy Conservation

?

?

?

?

Computerisation

?

?

related to Right to Information Act and

ensuring transparency in company's 6.12 The sales performance of the

activities.Company during the year 2003-04, 2004-05

and 2005-06 (upto December, 2005) is given

in the Table 6.3

6.16 During the financial year 2005-06, the

performance of the company with respect

to pollution control, safety health & 6.13 In order to strengthen its market

environment management, forest & position, NALCO has started the second

plantation activities has been satisfactory. phase expansion after the successful

The followings were the achievement:completion of the first phase. The present

All the units have applied for consent to Rs.4091 crore expansion will raise the

operate under Air & Water Act.capacity of its various segments as given in

Table 6.4.Aluminium Fluoride consumption was

reduced by 24% in Potline-III because of

new technology as compared to old 6.14 Variable frequency drive has been

potlines.installed in Anode Handling De-dusting

57,000 tonnes of ash of CPP and refinery unit to optimize the speed. Energy saving

has been utilized so far in different has been achieved. Speci f ic coal

activities like ash pond dyke rising, low consumption for the year 2005-06 (upto

l y i n g l a n d r e c l a m a t i o n , b r i c k December, 2005) could be maintained at

preparation and cement making.the level of 0.628T/T (0.622 T/T in 2004-05)

in comparison to MOU target of 0.7 T/T. 3,99,300 nos. of trees have been planted

The specific fuel oil consumption in in M&R and S&P Complexes.

calciners was reduced. Specific oil

15 Ha. mines out area have been consumption in SPP could also be reduced

planned for rehabilitation by plantation to a level of 3.905 lit/T from a level of 4.243

in this financial year.lit/T. Specific electrical consumption for

the alumina refinery dropped from a level Certification audit for all five units for

of 339.32 kwh/T to 336.06 kwh/T with O c c u p a t i o n a l H e a l t h S a f e t y

increase in consumption in Zeolite & SG Management System (OHSAS-18001)

main plant with increase in volume of have been completed successfully by

production. M/s.TUV and they have already

recommended for same.

NALCO is in process of upgrading ISO-6.15 Thrust during the financial year

14001 to 2004 version, which is likely to 2 0 0 5 - 2 0 0 6 h a s b e e n t o w a r d s

be completed by the end of this financial implementation of Enterprise Resources

year.Planning System in NALCO and

implementation of e-Governance initiatives Some modification was carried out in

Perfo

rmance

of P

ublic S

ecto

r and Jo

int S

ecto

r Com

panie

s

43

De-fluoridation plant of smelter to the facilities were supplie dregularly to

improve its performance. the user industries.

NALCO has applied for mining lease of

Utkal-E Coal Block and different studies

are in progress for preparation of EIA in 6.19 Recovery of TiO2 from Plant Sand and

order to apply for Environmental Recovery of Alumina from Partially

Clearance.Lateritised Khondalite is being carried out

To monitor fugitive emission in pot at R&D Centre in M&R Complex,

rooms one laser beam instrument has Damanjodi besides addressing to day-to-

been procured & commissioned. day process related problems.

Raising of height of red mud pond with

new gar land dra ins have been 6.20 Characterization of Baked Anode for

completed.process monitoring, determination of cell

factor for prediction of net carbon Raising of height ash pond of CPP &

consumption, performance monitoring of refinery is continuing.

pots lined with partially damaged cathode

blocks and development of indigenous tri-

metallic anode clads etc. are the R&D

6.17 DSIR, Ministry of Science & activities in the Smelter Plant, Angul for

Technology, Government of India have the reported period.

recognized both the in-house R&D units of

NALCO at M&R Complex, Damanjodi and

S&P Complex, Angul. Renewal of 6.21 The industrial relations scenario of the

extension has been granted up to 31st Company has remained by and large

March, 2006. Facilities developed at both peaceful. There have been almost no

the R&D Centers are continuously being mandays loss due to industrial relations

utilized for addressing to day to day problem.

problem solving, process & product

development, energy conservation, waste

utilization activities with emphasis on 6.22 The company has adopted the development of in-house expertise for principle of equal opportunity to the growth of indigenous technology in the women employees in the matter of Company by adopting novel innovative employment. In spite of the nature of job practices. Thrust has been laid on requirement, the company has 317 number patenting of process know-how developed of women employees at different levels and in the Company either through in-house or categor ies . Apart from providing collaborative R&D efforts.developmental and functional training

programmes to the women employees.

institutional mechanism has also been put 6.18 Special Grade Alumina pilot plant

in place to avoid sexual harassment of facilities were run to its full

women. As a mark of development in their capacity.Different products produced from

? In-house R&D Activities:

Alumina Refinery, Damanjodi

?

Smelter Plant, Angul ?

?

RESEARCH AND DEVELOPMENT

ACTIVITIES

INDUSTRIAL RELATIONS

PERSPECTIVE PLAN FOR WOMEN

WELFARE

Special Grade Alumina & Hydrate

44

Perf

orm

ance

of

Public

Sect

or

and J

oin

t Sect

or

Com

panie

s

individual leadership, women executives of particular and weaker sections of the

the company have got a place as local people living in the periphery

c o o r d i n a t o r / m e m b e r o f n a t i o n a l area.

organizations like Women in Public Sector 2. To play a catalytic role in improving the

(WIPS). quality of life of the people living in the

p e r i p h e r a l a r e a s t h r o u g h

i m p l e m e n t a t i o n o f s y s t e m a t i c 6.23 The Presidential Directives issued

programmes of development.from time to time on reservation of SC/ST

3. To plan and implement suitable projects persons in employment have been

to improve the ecology and the scrupulously followed by the Company.

environment of peripheral areas.There are also exclusive cells constituted

for the welfare of the SC/ST employees.

The alumina and mines units of the

company are placed in the midst of a 6.25 Since the company is committed to its predominantly tribal area at Damanjodi. obligation for social sector development The 600 families, who were displaced for every year, the funds allocable for social the establishment of the projects, have sector activities of the company is 1% of since been resettled in rehabilitation the net profit of the preceding year to be colonies with provision of various undertaken during the succeeding year.The amenities. Besides, direct employment in company is also providing additional funds Nalco has been provided to 585 persons on from time to time with special approval of the basis of one able-bodied person from the Board for local area development each displaced family. works.

6.26 Peripheral Developmental Committee

has been set up at units consisting of

Government Authorities, local Member of

Parliament, member of State Legislature 6.24 Keeping in view the Government's

Assembly and senior officials of the guidelines, NALCO has been taking various

company to identify projects of peripheral steps for development of local areas

development activities and ensuring its thereby helping to and increasing the

proper implementation and monitoring.standard of living of the people living in its

6.27 During times of distress and natural periphery. The main objectives of the

calamities the company is coming forward peripheral developmental programmes are

immediately to help the needy people.The :

company has already spent Rs. 5.76 crore 1.To take special steps for ameliorating

during the last five years on this account.living conditions of the land ousts in

WELFARE MEASURES

SALIENT POINTS ON THE COMPANY'S

SOCIAL RESPONSIBILITIES

MEASURES TAKEN BY NALCOFOR

REHABILITATION AND PERIPHERAL

D E V E L O P M E N T A C T I V I T I E S

(CSR activities)

45

Perfo

rmance

of P

ublic S

ecto

r and Jo

int S

ecto

r Com

panie

s

6.28 In its pursuit of preserving the art

and culture of Orissa, Nalco in association

with the Government of Orissa, is 6.32 During the period April to November

organizing Rajarani music festival and 2005, the total world aluminium supply was

sponsoring Kalinga Mohatsav.around 21.280 million MT against the

world consumption of 21.367 million MT,

thus showing a deficit of 0.087 million MT.

The market was driven by :-6.30 As on 31.12.2005, there are 63

physically handicapped persons in 1. The overall reasonably solid US market.

employment of the company in various 2. Although the European extrusion

identified posts. Measures are being taken demand has remained poor in the recent

to achieve 3% representation in all posts months, the construction activities in

in Group C&D and in identified posts in F r a n c e & S p a i n a r e s h o w i n g

Group-A&B as per section 33 of the encouraging signs.

Persons wi th Disab i l i t i es (Equa l 3. Chinese primary demand remains very Opportunities, Protection of Rights and

strong thanks to the strong growth in Full Participation) Act 1995. semis demand and production. For the

first 10 months of the year semis

6.31 MOU Rating achieved during last production is running 26% ahead of last

three years is given in Table-6.6. year.

4. Japanese flat rolled product has been

weak over the second half of the year.

Despite positive indicators regarding

economic growth, there has so far been

little sign of any improvement in

demand. However, there has been

continued growth in demand from

automotive sector.

ALUMINIUM SURVEY

International market

EMPLOYMENT UNDER DISABILITY

ACT, 1995

MOU RATING

Table 6.6

MOU Rating of NALCO

Year Composite Grade

Score

2002-2003 1.427 Excellent.

2003-04 1.47 Excellent.

2004-05 1.43 Excellent.

46

6.29 The Table 6.5 shows the employment of personnel as on 31.12.2005 in NALCO

Table 6.5

Employment of Personnel in NALCO

Group Total No. SC ST Ex- PH LDP Minority

of employees SM

Executives 1761 205 104 10 04 18 76

Including Trainees

Non-executives 5641 983 1220 37 59 1767 205

including Trainees

Total 7402 1188 1324 47 63 1985 281

Perf

orm

ance

of

Public

Sect

or

and J

oin

t Sect

or

Com

panie

s