Aditya Birla Group flagship Hindalco Industries is mulling entering exploration and mining of critical minerals, including lithium, graphite, copper and nickel, Managing Director Satish Pai told Moneycontrol in an exclusive interview. The move comes as metals and mining firms look to tap surging demand for electric vehicles (EV) battery materials in the Indian market.
"We have taken the documents for many of the mines that are coming.. the auctions are happening. So we are interested, we have looked at lithium, graphite, nickel and copper that seems to come with nickel in some mines," Pai said.
"One thing we have realised is that India is very largely under explored, so there's a lot of potential. So we are actually taking our mining expertise, starting to look at the mines from an exploration point of view as well," he said.
Apart from Hindalco, Coal India, Hindustan Zinc and Jindal Power are among the companies weighing submitting bids for the critical mineral blocks, highlighting healthy interest from the state-owned and private players of the industry.
Seizing the EV space
Hindalco, which is an industry leader in aluminium and copper, has been pushing to enter the EV space through partnerships and new manufacturing facilities. The India electric vehicle market size is projected to grow from $3.21 billion in 2022 to $113.99 billion in 2029, according to a report by Fortune Business Insights.
In December, the aluminium producer announced its plan to set up a battery foil manufacturing facility at Sambalpur in Odisha with an investment of Rs 800 crore. The facility, to be commissioned by July 2025, will initially produce 25,000 tonne of aluminium foil, which forms the backbone of lithium-ion and sodium-ion cells.
"The EV space is very interesting for us.. because to lightweight the vehicle a lot of body parts will go into aluminium. For Novelis, the biggest growth has been EVs because they make doors and bumpers," Pai said, adding that the company is trying to set up contracts and qualify its aluminium foil with battery manufacturing firms.
The company has also connected with Korean battery manufacturers to qualify its aluminium foil. "We are using our Mouda plant, which makes foil, to get the foil qualified so that when the new plant comes up we will be able to tap into battery manufacturing," Pai added.
Novelis' Bay Minette project
Hindalco's stock slid on February 13 after its US-based subsidiary Novelis revised guidance for the cost of its Bay Minette project. Novelis said on February 12 that Bay Minette project costs would see a 65 percent increase and a one-year delay. It projected the cost at $4.1 billion and expected it to be commissioned by the calendar year 2026 or the second half of FY27.
"Only when we did the engineering plans in detail, the budget went up. The cost increased due to the civil and construction costs," Pai said during a post-earnings call with reporters. The cost of the project has risen 30-40 percent to $7,000 per tonne.
Pai said the company may plan to fund the capital expenditure through bridge loans but did not specify the amount. Asked if the capex plans will impact the cash flow, he said, "Yes, it will impact the cash flow but over the next three years we will be generating a lot of cash."
A bridge loan is a type of gap financing arrangement wherein the borrower can get access to short-term loans to meet short-term liquidity requirements.
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