Minimum Feasible Capacity for Specialty Grades of Hydrate and Alumina Plant

Hi Friends,

In earlier post, we have already discussed about Minimum feasible capacity of smelter grade Alumina refinery which is techno-economically viable to set up in any part of the globe. In present post, we will briefly discuss about minimum feasible capacity of specialty grades of  Alumina Plant.

It is well known fact that specialty grades of hydrate and alumina are marketed at premium price ranging from three times to five times of those of chemical grade hydrate and standard calcined alumina where as the production of specialty grades of hydrate and special alumina are approximately 15% to 20% higher than those of chemical grade hydrate and smelter grade alumina respectively. Because of increasing demand of specialty grades of hydrate and calcined alumina for various non-metallurgical applications all over the World has tremendous market potential with reasonably high profit margin. Thus, it gives us opportunity to think about the minimum feasible capacity of specialty grade alumina plant which can give high returns resulting in low pack back period. 


The preliminary study reveals that specialty grade alumina plant with 25,000 tonnes per annum production capacity is the minimum feasible capacity considering the availability of basic technological equipment for continuous operation on commercial scale. The estimated capital investment for such plant will be around US$ 25 million excluding the investment towards land and infrastructure facilities. The average manufacture cost of specialty grade alumina is estimated at around US$ 310 per tonne inclusive of all financial charges where as minimum  selling price will be ranging from US$ 600 to US$ 1000 per tonne of specialty grade alumina. Taking average level of sales realization at around US$ 800 per tonne of specialty grade alumina, the pay back period for total capital investment works out to less than 3 years. Specialty grades of hydrate have more profit margin compared to specialty grades of calcined alumina.


The preliminary financial indices prompt us to go ahead for execution immediately. However, It is always advisable to check the following basic information before taking final decision for execution-

1. Availability of about 3.0 million tonnes of chemical grade bauxite,
2. Required utilities and services,
3. About 20 hectares of land for plant,
4. About 50 cubic meters per hour of industrial grade water,
5. Other basic input raw materials and skilled workforce.

In addition to all stated above requirements, the detailed feasibility study is a must to confirm the market scenario, fixing of product-mix, finalizing the required process technology and re-look at outcome of final financial parameters. Execution of such plants definitely require technical competence in process expert as a process technology supplier for the project, otherwise execution with superficial knowledge about the process may be detrimental for the stake holders in the project - this is just a word of caution from our expert team.

These are just the basis to initiate working on this lucrative project. Please put your views / suggestions / remarks / comments, if any.

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Thanks and regards.

Kunwar Rajendra

Capex, Opex and Techno-economic Viability for Green-Field Alumina Refinery in India

Hi Friends,

Today is the great day for all of us who are deeply associated with this knowledge sharing technical blog on Alumina processing technology. It is needless to mention here that our blog has earned a prestigious position among the people of Bauxite-alumina-aluminium fraternity in short span of time. Congratulations to all concerned on the eve of crossing the total viewer mark of 130,000 today. This glorious moment is remarkable and memorable as we are proceeding ahead in setting the new height of success. We are continuously receiving appreciations from our learned friends for high level of quality of content published so far and feedback for further improvements. 

In present post, we are bringing out some special facts which will be useful for the top notch officials in taking strategic decisions with regard to capital investments, Operating cost and techno-economic viability aspects for setting up new Alumina refineries in India. 

As such, only a few Alumina refineries were constructed and commissioned across the globe during last decade. Broad details and present status of new refineries executed over last 15 years / under execution presently  in India are outlined in subsequent paragraphs-

1. 1.4 Mtpa Vedanta Alumina Refinery, India: This plant was designed for 1.4 Mtpa alumina with two streams each stream having 0.70 Mtpa production capacity. One of the stream of this plant was commissioned  in 2006 with non-designated source of bauxite as Niyamgiri deposits could not be cleared  by the Government of India for carrying out bauxite mining activities.  The specific capital investment for this plant was very low as the company took advantage of volatile market of equipment and facilities during execution period. But processing of low alumina content and high reactive silica content in bauxite of unidentified areas during commissioning itself made the plant uneconomical. Finally, the shutdown of the plant was forced on 9th December 2012 because of non-availability of bauxite. Plant remains shutdown as yet. However, the Vedanta management is striving to restart the operation of this plant shortly even with imported bauxite.
2. 1.4 Mtpa Anrak Alumina Refinery, India: This plant is located at about 70 km from Visakhapatnam in the state of Andhra Pradesh in India. This Alumina refinery has two streams of 0.70 Mtpa each and the execution is expected to be completed for commissioning by end of the current year - 2013. Most of the equipment and facilities of this plant have been installed and one of the process streams out of two are in readiness for trial but no adequate bauxite available as the earmarked Jarrella bauxite deposits are yet to be cleared by the Government. The trial run for Stationary calciner supplied by Outotec Germany was done in early first week of April 2013 with purchased hydrate and a few thousand tonnes of calcined alumina could be produced. HSD was used as the fuel for firing followed by HFO for calcination during commissioning trial. The estimated specific capital investment of this plant was much higher than that of Vedanta. But this plant could save substantially on technology, engineering and site activities during implementation.
3. 1.5 Mtpa Utkal Alumina Refinery, India: This plant is owned by Aditya Birla group of companies. The execution of this plant was conceived sometime in 1996. The construction of this plant is in advance stage and mechanical completion of this plant is expected by the end of 2013. This plant has been designed by Rio Tinto Alcan Australia who are considered leader in process technology across the globe. But because of inordinate delay in implementation because of various socio-political reasons, the capex of this project has increased substantially. Thus the specific capital investment of Utkal alumina plant was much higher than targeted figure. 
4. 1.4 Mtpa JSW Alumina Refinery, India: Under diversification plan, JSW group company decided to set up alumina refinery in Vijaya Nagaram district of Andhra Pradesh with state of the art and most modern plant associating Rio Tinto Alcan Australia as technology supplier in the year 2005. The company has acquired adequate land but execution of project is under hold awaiting clearance from Government of India for bauxite mining from Araku group of deposits.
5. 1.0 Mtpa NALCO Alumina Refinery, India: National Aluminium Company (NALCO) has initiated studies for setting up 1.0 Mtpa Alumina refinery near Mandavi in Gujarat. As per our estimates, the specific capital investment for this project will be high at around US$ 1000 per   tonne of Calcined alumina mainly because of Lignite based Co-generation plant, required Desalination plant, marginally bigger size equipment requirement because of lower alumina recovery from available bauxite in Gujarat and additional expenditure towards development of infrastructure facilities like port etc. for the project.

The capital expenditure data analysis clearly reveal that specific capital investment in setting up Alumina refineries in India varies from US$ 650 to US$ 1000 per tonne of calcined alumina depending on geographic location of the plant in the country. The capex will be lowest for the plant in Orissa, Gujarat and Jharkhand where as the same will highest in Gujarat.  The reasons are well known to all concern as elaborated in above paragraph. Also, the opex will be higher mainly because of poor plant efficiency figures due to wide variation in mineralogical and chemical composition of basic input material, Bauxite. Also, the volume effect of plant capacity because of low reserve of Bauxite in Gujarat is the other reason. It will be prudent to mention that comparatively lower grade of bauxite, non-availability of desalinated water, availability of low calorific value solid fuel source (Lignite) for co-generation plant are the main reasons for highest capex. Again, on opex part, the same will be abnormally high because of poor plant efficiency figures coupled with low grade of bauxite in Gujarat. At current price level of Caustic soda, Heavy furnace oil and Lignite, even the economic viability for Alumina refinery in Gujarat is a question mark because of high specific capital investment of around US$1000 per tonne and estimated operating cost excluding financing charges (interest & depreciation) at around US$ 200 per tonne of Calcined alumina as per preliminary estimates.However, the actual figures of Capex and Opex can be ascertained by Project Owner with detailed studies before taking financial decision on the matter. In spite of all these facts stated above, Green-field Alumina refineries will be installed mostly in India and Vietnam in coming decade because of huge bauxite reserves of comparatively improved quality than other countries across the globe. In other words, India and Vietnam are the future destinations for green-field Alumina refineries in years to come.

Trust, the above deliberation will give a glimpse of required capex, opex and economic viability aspects for setting up green-field Alumina refinery to one and all across the globe. The author of this technical article will welcome your comments on the subject, if any. Please feel free in sharing your views.

Regards.

Rajendra Kunwar
rajendra@ceti.co.in
www.ceti.co.in

Market Potential for Specialty Grades of Hydrate and Alumina

Hi Friends,

We all are well aware that about 10 to 11% of total alumina produced in the World is used for non-metallurgical applications. The hydrate or alumina used for non-metallurgical grades are categorized as Specialty grade or Specialty grades of hydrate and alumina. Generally, these specialty grades of hydrate and alumina are marketed at about 2 to 5 times of metallurgical grade hydrate and alumina. The production of specialty grade hydrates and alumina require additional facilities to attain the desired product quality particularly with respect to purity level, fineness and other specified properties depending on their various industrial applications. The production of specialty grades of hydrate and alumina are 15 to 20% higher than standard hydrate and alumina.

In present scenario, the increasing demand for a few selected grades of hydrate and alumina in domestic as well as International market has pushed the selling price to reasonably high level. Thus, all special alumina producers have jacked up the selling price of their products to a level beyond imagination.  

Here, I would like to put the example of Chemical grade hydrate which is used for manufacture of chemicals like Non-ferric alum, Sodium aluminate, Zeolite-4A and Fire retardant fillers. The production cost of Chemical grade hydrate lies between US$90 to US$100 per tonne in moderately efficient Alumina refineries. Presently, Chemical grade hydrate is being sold at a price between US$330 to US$350 per tonne depending on the geographic location of the plant and proximity to consumers. Similar is the market scenario for many other grades of specialty grade hydrate and alumina.

Observing the tremendous market potential for specialty grades of hydrate and alumina, existing alumina producers are modifying the process circuit for converting the plant from Metallurgical grade to Specialty grades of hydrate and alumina. Also, a few specialty grade alumina plants are under execution and planning stage in the World.

Looking at the past and the present trend, it can be concluded that market potential for specialty grades of hydrate and alumina in future is promising.

Seek your views / comments, if any.

If you like this article, then please press your rating as  +1  .
Thanks and regards.

Kunwar Rajendra