Reliance eyes entry into aluminum industry to take on Adani
What's the story
Reliance Industries Limited (RIL), led by Mukesh Ambani, is considering a foray into the aluminum industry. The move comes shortly after Gautam Adani's Adani Enterprises made an $11.5 billion entry into the sector. The development could lead to another business showdown between India's two richest billionaires. The information was revealed by four people familiar with the matter who spoke to Mint on condition of anonymity.
Strategic move
RIL's move to enhance coal gasification viability
The potential entry into metals production is part of RIL's broader strategy to make its coal gasification business commercially viable. Even though the plans are still in the exploratory phase, RIL recently bid for Karlapat bauxite block in Odisha, a key ore for aluminum refining.
Project details
Coal gasification project in Andhra Pradesh
RIL is also working on a coal gasification project in Andhra Pradesh. The company has won two coal blocks through an auction at Recherla and Chintalpudi in the state.
The proposed entry into aluminum could tie up the company's coal resources and gasification plans with metals production.
As per reports, Reliance has proposed to invest ₹2.73 lakh crore over 30 years to set up India's first integrated underground coal gasification complex in Andhra Pradesh.
Market dynamics
Increased competition in aluminum sector
In June, Adani Enterprises announced plans to invest about $11.5 billion in a two million tons per annum (MTPA) aluminum project in Odisha.
The project is being developed in partnership with UAE's International Holding Company (IHC).
If RIL goes ahead with its plans, it will be the fourth major conglomerate to enter the sector. This would increase competition among established players such as Vedanta and Hindalco.