NEW DELHI, December 27: The Union ministry of mines has expressed doubts over the feasibility of two 1 million-tonne-per-annum alumina plants, promoted by Indal and L&T, respectively.Both the companies are setting up the units as 100 per cent EoUs. Indal's letter of intent for the project granted by the ministry of industry expires in September, 1998, while L&T's time runs out in September, 1999. Both were provided LoIs way back in 1992. "None of the companies will be able to commence production within the prescribed time limit," a mines ministry note said.The ministry's views were sought by the Vizag Port Trust (VPT) subsequent to an application made by both the companies for setting up captive berths in Visakhapatnam to export alumina and import caustic soda. L&T and Indal have sought permission for lease of land to set up Rs 250 crore complexes at the Vizag port but with the caveat that the facilities be allowed to be built without going through a competitive tendering process. VPT had wanted to know from the ministry whether the projects were viable in the first place and, if so, what should be the mode of ownership and management of the port facilities.According to the ministry of mines, L&T had conducted a feasibility study with Aluminium Company of America but, at one point, the US conglomerate desired to delay an investment decision in view of depressed market conditions. What is more, L&T has yet to elicit a go-ahead from the state government on its mining lease, the ministry has observed. The company had initially wanted to source its coal supplies from the Ib Valley in Orissa but the proposal had run into rough weather.Though the coal supply snags are being sorted out, "the location of foreign partners and tying up of equity are yet to be formalised," the ministry has noted. Therefore, the possibility of the unit coming up, before the time limit of the LoI expires, is remote.The Indal project, on the other hand, is at a slightly more advanced stage. The bauxite mining lease has apparently been tied up. EIL had conducted a feasibility study and Alcan International and Alsea Alussuisse have been selected as technology partners. The process of induction of foreign equity from Norks Hydro and participation of the Tatas in the risk capital of the project is reportedly progressing well.
