Rio Tinto inks MoU with AMG to set up green aluminium plant in India

Mumbai: Rio Tinto, the world's second-largest mining company, on Thursday confirmed plans to re-enter India after nearly a decade, setting up an integrated clean energy-powered aluminium project in partnership with AMG Metals and Materials, backed by Greenko Group founders.

Once fully commissioned, the facility is expected to be the world's largest green aluminium plant, the companies said in a joint statement.

The firms have signed a memorandum of understanding to conduct a feasibility study for setting up a primary aluminium smelter with a capacity of 1 million tonne per annum. They will also assess the feasibility of a 2 mtpa alumina production plant.

The entire project is expected to run on 1.8- 2 GW of solar and wind capacity, backed by 24x7 pumped hydro storage, the companies said.

The first phase of the project will see the development of 500,000 tonnes of capacity for aluminium production, they said.

ET was the first to report about the alliance between the Anglo-Australian company and AMG M&M in its Thursday edition.

Even though the official communication did not disclose details, people in the know said a port-based site in Andhra Pradesh has been identified for the greenfield capacity.

The project is expected to entail a capital expenditure between $5 billion and $7 billion, invested in phases, ET reported in its Thursday edition.

It will compete against Hindalco and Vedanta Group.

With an annual capacity of 2.4 million tonnes, Vedanta is currently the largest producer of primary aluminium in the country. The company is currently expanding this to 3 million tonnes.

"India is a compelling location for this potential project and aligns with our long-term vision for a globally more diverse and resilient aluminium business," said Jerome Pecresse, chief executive of Rio Tinto Aluminium.

Low-carbon aluminium will cater to India as well as export markets such as the European Union, which is planning to impose carbon tax on imports, or Carbon Border Adjustment Mechanism (CBAM). Rio Tinto has been increasing its exposure to commodities essential for the energy transition value chain, building on its portfolio of top-tier copper and aluminium projects.

India is the second-largest producer and third-largest consumer of aluminium, which finds application across construction, packaging, building, transportation and power sectors, among others.

For its proposed plant in India, Rio plans to import bauxite from its mines in Australia.

"Over the last few years, we have been able to deliver a multitude of decarbonisation solutions comprising electricity, molecules, chemicals and fuels. We are excited to expand that further to the materials space," said Mahesh Kolli, group president at AMG M&M.