Nearly a decade after its exit from the country and India revamped its mining policy to lure global investors, British-Australian giant Rio Tinto is set to enter the country, with significant investment plans in the aluminium sector. The global mining major, known for its technological edge, has signed a signed a Memorandum of Understanding (MOU) with AMG Metals & Materials to “jointly assess the feasibility of developing a primary aluminium smelter up to a 1 million tonnes per annum (Mtpa) capacity along with 2 Mtpa of alumina production.” According to statement issued by both firms, the ventures will be powered by wind and solar energy firmed by pumped hydro storage.
A study to evaluate a potential first-phase – 500,000 tonnes per annum primary aluminium smelter –in a “favourable location” in India will be carried out, the two companies added, without specifying the investment projections or whether any locations are already under consideration.
The move comes at a time when India’s bauxite production has been stagnant through the last decade. A 2015 policy introduced mandatory use of the auction route for allocation of non-fuel mineral rights, and included several measures to spur private investments, but the progress has been rather slow. It is not clear will Rio Tinto will seek upstream integration, with investments in bauxite mining ventures.
India is the world’s second biggest aluminium producer and third biggest consumer, with demand set to double over the next decade. Currently, the aluminium market in the country is around 5 mtpa. The world primary demand for aluminium has reached around 70 million tonnes.
“This study is an important step in our ambition to grow our global, low-carbon aluminium footprint while exploring new project delivery approaches and opportunities in emerging markets. Partnering with AMG Metals & Materials enables us to assess how we can develop low-cost responsible aluminium production powered by renewable energy,” Rio Tinto Aluminium Chief Executive Jérôme Pécresse said. He added that India is a compelling location for this potential project due to its rapid economic growth and strategic position and aligns with the company’s long-term vision for a globally more diverse and resilient aluminium business.
As part of the study, AMG M&M, promoted by the founders of Greenko and AM Green, will examine a firmed renewable energy solution with Greenko, while Rio Tinto will explore a commercial alumina solution. The study will also assess smelting technology options to determine the most cost-effective solution for the project.
“This MOU could deliver much needed low-carbon metal at scale to propel decarbonization initiatives in global supply chains across auto, construction, consumer packaging and many more segments,” Group President of AMG Metals & Materials and Greenko Mahesh Kolli said.
Greenko has a near-term operational renewable energy capacity of 10 GW across solar, wind and hydro and is building 100 GWh of single cycle storage capacity across India.
AM Green is also developing low-carbon ammonia projects across multiple locations in India with a goal to reach 5 Mtpa of green ammonia capacity by 2030. Its first plant currently under construction in Kakinada with a projected capacity of 1 Mtpa of green ammonia will be one of the world’s largest Renewable Fuels of Non-Biological Origin (RFNBO) compliant green ammonia facilities, supporting efforts to achieve net zero targets both in India and OECD markets.
AM Green is also developing production capabilities for other net zero molecules and chemicals including green caustic soda, e-methanol, olefins & biofuels for decarbonization in hard to abate industries.