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Vedanta Aluminium Poised for Growth as It Transforms into a Standalone Operation

Interview with John Slaven, Vedanta Aluminium

John Slaven, CEO of Vedanta Aluminium.

Vedanta Aluminium is a major player in the aluminum industry, operating two aluminum smelters in India, including its plant in Jharsuguda, Odisha, and its subsidiary unit Bharat Aluminium Company Limited (BALCO) located in Korba, Chhattisgarh. In addition, the company operates an alumina refinery in Lanjigarh, Odisha. Recently, it was announced that the company would be demerged from Vedanta Limited, making it a standalone operation.

Light Metal Age spoke with John Slaven (pictured), who was named CEO of Vedanta Aluminium in October 2023 and will be leaving this role on October 31, 2024, about the demerger and the company’s current sustainability, research, and growth goals. Slaven has more than three decades in the global metals and mining industry, having held several key leadership positions in global companies, including stints at BHP’s aluminum business and Alcoa. During his tenor as CEO of Vedanta Aluminium, Slaven focused on unlocking the full potential of the company through innovation and digitalization, expanding production capacity, and establishing the company as one of the top three aluminum players globally.

Please provide an overview of Vedanta Aluminium and its operations. What are the main geographical markets and industrial sectors that it serves?

Vedanta Aluminium is India’s largest producer of aluminum, manufacturing nearly half of the country’s aluminum supply (i.e., 2.37 million tonnes in FY24) and is a global leader in offering value-added aluminum products that find critical applications in crucial industries. Our product portfolio includes billets, which are widely used in sectors such as aerospace and solar; wire rods, which are used extensively in electrical and construction sectors; ingots, which serve as the primary form of aluminum for various downstream processes; and rolled products, which are used in several consumer-facing products. We also produce primary foundry alloys, which are utilized by the automotive industry.

Vedanta Aluminium’s products are vital to several key sectors, including automotive, aerospace, construction, consumer goods, and renewable energy. We serve customers in nearly 50 countries globally, including the Americas, Europe, and the Middle East.

What is the status of the aluminum industry in India? Where are the areas of growth you are seeing?

India’s aluminum industry is poised for significant growth in the coming years, with demand expected to double from 5 million tonnes to 10 million tonnes by as soon as 2030. This surge is being driven by factors such as the government’s infrastructure development initiatives, the rising adoption of electric vehicles, the accelerating domestic energy transition, and strong demand from established sectors like construction, power and transmission, and automotive.

However, despite the robust outlook, India’s per capita aluminum consumption remains relatively low at just 3 kg, compared to about 12 kg globally. This disparity highlights a substantial opportunity for growth. Meeting rising demand while ensuring responsible operations will require significant innovation and investment in clean technologies. Additionally, the industry must navigate global economic uncertainties and regulatory shifts. Yet, these challenges present opportunities for us to demonstrate sustainable practices, enhance efficiencies, and integrate technical advancements.

Vedanta Aluminium operates two smelting operations, located in Jharsuguda, Odisha, and Korba, Chhattisgarh, India.

At the end of 2023, Vedanta Limited announced the demerger of Vedanta Aluminium into a separate “pure play” company. How did this decision come about?

The decision to demerge Vedanta Aluminium into a distinct entity is part of a broader strategy at Vedanta Limited to unlock value and attract significant investments for the growth of its various business units. By creating independent, sector-focused companies, we can more effectively pursue our strategic agendas, align better with customer needs, and respond efficiently to investment cycles and market dynamics.

This move also allows us to better showcase our technological innovations, environmental stewardship, and growth potential, making it easier for the market to recognize our value and partner in our journey. Additionally, the demerger will open opportunities for global investors, including sovereign wealth funds and retail investors, to invest in companies that are directly linked to India’s flourishing growth story.

How will the demerger affect Vedanta Aluminium? What are the benefits to the company?

The demerger will allow us to focus exclusively on our core operations and deploy targeted business strategies. Additionally, the demerger will allow us to aggressively pursue growth, accelerate towards our 3 million tpy capacity goal, and expand our market with a strong commitment to innovation and value-added products. Ultimately, this simplification of Vedanta’s corporate structure enables us to focus more keenly on our strengths, leveraging them as accelerators to drive continued business growth.

What is the status of the demerger? What further steps need to be taken to complete the process?

The demerger process is actively underway and is progressing well, with completion expected within the next couple of quarters. We have already secured a No-Objection Certificate (NOC) from India’s stock exchanges for the proposed demerger, which has been submitted to the Securities and Exchange Board of India (SEBI). Additionally, we have received approvals from the majority of our creditors, including the State Bank of India. Currently, we are awaiting SEBI’s NOC. We have recently filed the demerger scheme with India’s National Company Law Tribunal after securing all the necessary approvals for an order to conduct members’ and creditors’ meetings.

Vedanta Aluminium is the largest exporter of billets in the Indian subcontinent.

What is the company’s approach to sustainability and environmental performance?

Vedanta Aluminium is deeply committed to sustainability and environmental stewardship, embedding responsible practices across all aspects of our operations. Recognizing the potential of aluminum as a prime enabler in building a sustainable future for our world, we aim to minimize our environmental impact while maximizing social benefits. Our goal is to achieve net-zero CO2 emissions by 2050 or sooner, driven by a two-pronged strategy. Firstly, we are reducing our carbon footprint by increasing the quantum of renewables in our energy mix, achieving higher efficiencies in resource utilization, and transitioning to low-carbon energy sources. Secondly, we are offsetting our carbon footprint through afforestation efforts in the vicinity of our locations.

We have also signed long-term power delivery agreements to source an initial 1.3 GW of renewable energy to help decarbonize our operations. Comprising a mix of both solar and wind energy, it will help power our operations across Odisha and Chhattisgarh. This step is expected to reduce our greenhouse gas emissions of ~3.2 million tonnes of CO2 per year. Further, we plan to have renewables comprise 30% of our energy mix by 2030. These strategic efforts have positioned us at the top of the S&P Global Corporate Sustainability Assessment for the aluminum industry in 2023, reflecting our global leadership in responsible business practices.

How does Vedanta Aluminium approach research and development within its operations? What are some key projects that the company has focused on?

At Vedanta Aluminium, research and development (R&D) efforts are integral to our mission of delivering high-quality solutions to our customers. Our R&D centers are dedicated to exploring ways to enhance the properties of our aluminum, making it more efficient and adaptable for various applications. We leverage cutting-edge technologies from both established technological leaders and emerging startups to accelerate innovation and bring new products to market faster.

We are also developing more ways to ensure our aluminum is sustainably produced. A recent achievement in this regard is the patenting of a new bauxite refining process that reduces bauxite residue by 30%, while improving alumina yield. In addition, we are working with leading academia and industry peers on a project to derive scandium, a rare earth, from bauxite residue, as part of our efforts to build a circular economy. Looking ahead, we are committed to expanding our R&D capabilities, focusing on sustainable practices, waste management, and deploying Industry 4.0 technologies to drive continuous improvement and innovation.

In December 2023, Vedanta Aluminium announced the development of a patented pot lining technology capable of improving energy efficiency within the smelter. Can you describe this new technology and how it was developed?

Our groundbreaking pot lining technology, known as the “Vedanta Lining Design,” enhances both the energy efficiency and lifespan of our smelting pots, reducing energy consumption by 200 to 250 kWh per tonne of aluminum produced. Developed through advanced numerical computational modelling, the technology simulates electrical and thermal behavior within the pots, optimizing their design for maximum efficiency.

As part of its innovation, we have successfully integrated graphitization into the pot lining design, a process that makes the properties of the cathodes used in aluminum production more akin to graphite—an excellent conductor of electricity known for its stability at high temperatures. The process enables the cathodes, crucial to the smelting process, to display enhanced electrical conductivity, contributing to more energy efficiency and sustainable operations.

After a successful year-long trial, this pot lining technology is being deployed across our smelters. On full deployment, the technology is expected to reduce greenhouse gas emissions by significant levels annually at our Jharsuguda operations alone.

What work has the company done to explore the use of biodiesel in its operations? What have been the results of those trials?

BALCO recently conducted successful trial runs using biodiesel as a fuel in its smelter operations in Korba, Chhattisgarh. These trials involved using biodiesel to preheat ladle vehicles that transport molten aluminum from the potlines to the casthouses for processing. The results of these trials have been encouraging. Using biodiesel for preheating ladles has effectively removed any traces of moisture, which helps maintain the purity and temperature of the molten aluminum during transportation.

Additionally, since biodiesel is derived from organic matter, it produces significantly lower greenhouse gas emissions compared to conventional fuels.  We are also exploring other forms of biofuels, such as biomass briquettes, and have been steadily integrating these into our energy mix.

What are some of Vedanta Aluminium’s recent product developments?

Over the past two to three years, we have achieved significant advancements in product development. In 2022, we introduced Restora, India’s first green aluminum product range. This product caters to the growing demand for sustainable materials by being produced using renewable energy and achieving a greenhouse gas emission intensity below the global threshold for low-carbon aluminum. Another variant, Restora Ultra, is produced using recovered aluminum dross and has a carbon footprint near zero.

In 2023, we further expanded our wire rods range with the introduction of advanced variants, including T4, AL59, and the 8xxx series. These products, manufactured using cutting-edge continuous casting technology, set new standards in performance for the global power and transmission sector. They also have applications in the automotive, building, infrastructure, and electronics industries.

Additionally, to enhance our customers’ experience and provide seamless access to our extensive product range, we launched the Vedanta Metal Bazaar. This online platform offers over 750 product variants and facilitates the entire aluminum purchase cycle—from product evaluation and AI-driven price discovery to delivery tracking and feedback provision, via an easy-to-navigate, accessible interface.

Does Vedanta Aluminium have any plans to expand the capacity or capabilities of its operations in the near future?

We are strategically positioned to meet the increasing demand for aluminum with major capacity expansion initiatives and a broader range of value-added products tailored for various industries. We aim to grow our metal production capacity to over 3 million tpy in the coming years, which is led by efforts such as the expansion of our BALCO smelter from 580,000 tpy to 1 million tpy and continuing to creep up capacity. In addition, we are focusing on achieving complete vertical integration, i.e. from mines to finished products. This will allow us to achieve self-sufficient supply security for our critical raw materials, while also helping reduce costs.

The most significant development is the ongoing capacity addition and debottlenecking projects at our Lanjigarh refinery, which will grow alumina production from 3.5 million tpy to 5 million tpy. We are also ramping up our domestic bauxite sources to reduce costs versus imported ore and are opening three new coal mines, which will reduce our power generation costs. Together, these projects will also insulate us against potential global economic or geopolitical uncertainties that could affect production volumes and raw material costs. We are also expanding our portfolio of value-added products and aim to have these comprise 90% of our product range, up from 60% at present.

How does Vedanta Aluminium plan to continue to be successful in the years to come?

We see unbounded potential for aluminum in the years ahead, and are well-poised to sustain our success by continuing to prioritize operational excellence, strategic expansion, and innovation. We are committed to optimizing our processes to enhance efficiency, reduce costs, and position ourselves as a high-quality, low-cost producer. Additionally, we are dedicated to providing customers with innovative, best-in-class products that set benchmarks for the global industry. This blended approach will help ensure we meet growing market demands while maintaining our competitive edge.


Editor’s Note: This article first appeared in the October 2024 issue of Light Metal Age. To receive the current issue, please subscribe.

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