Mines ministry firm on NALCO divestment

Monday, 28 October 2002, 08:00 Hrs
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PATNA: The Indian government is committed to divesting its stake in state-owned National Aluminium Company Ltd. (NALCO) in Orissa.

"We have finalised the proposed disinvestment of NALCO, which will begin soon," Union Minister of State for Coal and Mines Ravishankar Prasad told reporters Sunday.

Political parties in Orissa, barring the Bharatiya Janata Party, which is a partner in the ruling coalition, have opposed the government's divestment move.

Prasad contended that there is no opposition to NALCO's divestment within the federal government.

Prasad argued that the divestment policy would benefit India economically and there was no question of going back on it.

He justified the government's move on NALCO, saying "it is good for NALCO since the company's profits are based on fluctuation of prices on the international market."

NALCO's viability depends on price fluctuations and international market pressures, the minister said.

The 24 billion state-owned aluminium major is a key employment provider in Orissa.

The company was set up in 1981 to exploit the state's huge bauxite reserves. Its exports totalled 13 billion in the year ended March 2001.

According to the government's plan announced in July 2001, about 10 percent of NALCO's shares would be sold in the domestic market, 20 percent would be offered to overseas investors and 29.15 percent would be sold to "strategic" buyers.

Two percent of the company's equity would be reserved for NALCO employees. The government's stake would thus come down from the existing 87.15 to 26 percent.

Many global aluminium majors have reportedly shown keen interest in the company's divestment.

Russian Aluminium (RusAl), the world's largest aluminium producer at 2.5 tonnes, is the latest to join the race, ministry sources said.

French aluminium maker Pechiney is also reportedly keen on taking a stake in the Indian aluminium company. It is exploring avenues to set up a bauxite-alumina refinery in the country, they said.

Two companies from Germany and Hungary have also expressed interest in NALCO.

Among the Indian companies, largest aluminium major Hindalco has expressed its interest along with Sterlite Industries and the Oswal group.

Hindalco has reportedly picked up close to four percent shares in NALCO through open market purchases.
Source: IANS
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