Hindalco confident of meeting $5 billion capex for Bay Minette aluminium plant, first such in US in nearly 40 years

Aluminium producer Hindalco Industries is confident of maintaining $5 billion capital expenditure for its global growth project Bay Minette which is being executed by US subsidiary Novelis, Managing Director Satish Pai said in a post-earnings media call on November 7.

Announced in 2022, the Bay Minette project was originally pegged at a $2.5 billion capital outlay, which was later raised to $4.1 billion in 2024, sparking shareholder concerns due to the cost overun. The project is the first fully integrated aluminium plant being built in the United States in nearly 40 years.

The recent cost increases come as the world's largest alumunium producer deals with traditional inflation, tariffs and higher costs due to competition for contractors and labor, given the number of significant construction projects underway in the US.

However, the management is confident of the current capex outlay. "We'll do the project at around $5 billion because we have already built in some contingency. We have now 8 to 12 months of intense execution that is going on on the ground. And I think that this plant in the current environment is going to be a big game changer for us because we will be having capacity in the the US. Whereas anybody bringing in metal from outside will be negatively impacted by tariffs, so we are also very confident," Pai said during the media briefing, in response to a query asked by Moneycontrol.