Gautam Adani is expanding his sprawling empire by venturing into aluminium business that is dominated by the likes of Aditya Birla and Vedanta groups.

Adani Enterprises Ltd, the flagship company of the diversified Adani Group, has formed a wholly-owned unit named Mundra Aluminium Ltd to set up alumina refinery and aluminium smelter.

Adani Enterprises did not disclose details of its planned alumina refinery and aluminium smelter while announcing the formation of a subsidiary to pursue the aluminium business, in a filing to the stock exchange.

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Over the past few years, the Adani Group has entered new businesses such as airports, roads, oil refining and petrochemicals, data centre, solar energy, warehousing, real estate, super app and logistics technology to add to its industry leading positions in ports, power, transmission, gas and edible oils.

Eyeing Nalco

Industry sources believe that by floating a subsidiary, Adani could be preparing the ground to participate in the bidding process for privatising state-owned National Aluminium Company Ltd, which is expected to be considered by the Cabinet soon.

Aluminium could be a standout metal next year, according to Think, the Economic and Financial Analysis arm of Dutch multinational investment and financial services firm ING.

“The aluminium market is moving into a structural deficit, given the lack of investment in smelting capacity. While we will see some smelters bringing back capacity over the course of 2022, it will not be enough to alleviate the tightness in the market,” ING Think’s Head of Commodities Strategy Warren Patterson, wrote in a recent report.

Think has projected aluminium prices to average close to $3,000 a tonne next year.

US-based Fitch Solutions Country Risk and Industry Research (FSCRIR) said the continuing global economic recovery will support demand for aluminium following robust manufacturing activity. Outside of China, recovery in the construction industry that had contracted during the Covid pandemic and vehicle production will boost demand for the metal.

In the long-term, FSCRIR said aluminium prices will remain high as the demand will be supported by acceleration in the shift to green economy.

Fitch Solutions has forecast aluminium production at 69.95 million tonnes (mt) next year compared with 67.6 mt this year, while utilisation is projected to increase to 63.99 mt from 62.36 mt this year.

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