458 MINERALS YEARBOOK, 1978-79 
 
captive powerplant and a guaranteed coal supply are mandatory, considering
the electric power situation, if the plant is to be economically viable.
Ore would be supplied by mining the 360-million-ton Panchpatmali deposit.
The plant would be built at Damonjodi, 23 kilometers from Koraput. The project
must be reviewed and passed by several government groups, then by the Public
Investment Board and, finally, by the Cabinet before work can begin. The
French firm Pechiney Ugine Kuhlmann, which did the feasibility study for
the project, has the inside track on getting the design and consultants'
contract when the plant is approved. 
 Plans for the U.S.S.R.-backed 600,000-tonper-year Andhra Pradesh alumina
project were not as well advanced as the Orissa project. MEC began a detailed
exploration of the bauxite reserves at the Jerralla deposit in Visakhapatnam
District. These reserves, on which the proposed alumina plant will be based,
total about 200 million tons proved ore. The Russian plan appears to be bogged
down in financing and equipment supply negotiations. Government of India
(GOI) prefers to manufacture and supply as much of the equipment domestically
as possible. The Soviets proposal called for 100% imported components. Unlike
the Orissa project, this development would not include smelting facilities.

 In 1978 the GOI cleared a proposal by the Gujarat Mineral Development Corp.
to retain Hungarian experts to make a detailed feasibility study for an export-oriented
300,000-ton-per-year alumina project, based on a 50-million-ton bauxite deposit
in Kutch District, Gujarat. The study was being completed at yearend 1979.

 Exports to date have been small and generally consist of surplus production
from BALCO and Indian Aluminum Co. Ltd. (INDAL). The power shortages, however,
left a larger than normal surplus and alumina exports by BALCO were nearly
75,000 tons in FY1978-79. BALCO expects to have about 50,000 tons available
for export in 1979-80. INDAL exported about 15,000 tons to the U.S.S.R. in
1978. 
 Aluminum production in 1978 from the four aluminum companies picked up modestly
over 1977. Despite this increase, capacity utilization improved only marginally
from 69% in 1977 to 76% in 1978, due primarily to the electric power situation.
Madras Aluminum Corp. Ltd. (MALCO) in Tamil Nadu operated at 92% of its 25,000-

ton-per-year rated capacity, reflecting the relatively better power situation
in southern India. BALCO, the public sector company, operated at only 34%
of its 100,000-tonper-year capacity. Fifty percent of itscapacity has never
operated since its completion in 1977. Hindustan Aluminum Corp. Ltd. (HINDALCO)
at Renukoot operated at 66% of its 100,000-ton-per-year capacity, almost
entirely off its own captive thermal powerplant. 
 In 1979, the general power situation worsened and production dropped back
to around 1977 levels. 
 Total installed capacity was 321,000 tons per year for the four aluminum
companies. HINDALCO plans to install a new 20,000ton-per-year potline by
FY1982-83. The long-term expansion prospects for the industry look promising
in view of existing bauxite reserves and abundant labor. By the year 2000,
India's capacity could reach 1 million tons per year. However, the restraining
and very crucial factor remaining to be resolved is the power supply. 
 As industrial activity picked up during 1978, the demand for aluminum was
also strong, outpacing production by a wide margin. Consumption in FY1978-79
was estimated at 240,000 tons. Demand was projected to rise to 275,000 tons
in FY197980, 300,000 tons in FY1980-81, and 330,000 tons in FY1981-82. At
least 52% of domestic demand was from the electric power industry. Wjth the
GOI giving priority to increasing demand for electric-cable-grade aluminum.

 Because of the widening gap between domestic supply and demand, imports
have increased considerably. Although the 1979 gap was projected at 35,000
tons, plans called for the import of about 75,000 tons, in part to rebuild
inventories. Assuming that projected demand materializes, the GOI will have
no alternative but to rely on expensive imports for at least the next several
years. Aluminum imports through April 1979 were channeled through BALCO.
However, the GOl shifted this responsibiliby on May 1 to the Minerals and
Metals Trading Corp. (MMTC) because of the increased quantities of imports.
Exports of aluminum have been banned since August 1977. 
 Aluminum prices are fully controlled by the GOT, and financial returns allowed
were reportedly quite small. To compensate the producers for cost increases
because of higher electricity charges, the Government allowed prices to rise
on October 1, 1979. The