Hindalco Industries shares trade flat; metals giant says Meenakshi coal mine to begin production in 2028

The company on Monday said it had secured the allocation of the Meenakshi Coal Mine in Odisha through a vesting order by the Ministry of Coal.

This development follows the successful signing of the Coal Mine Development and Production Agreement (CMDPA) on November 22, 2024, marking a pivotal step in the company’s journey towards resource securitisation, energy efficiency, and sustainable growth, Hindalco said in its press release.

"The Meenakshi coal mine, located in Odisha, is a fully explored block with a Peak Rated Capacity (PRC) of 12 million tonnes per annum and ~285.23 million tonnes of geological reserves. With a favourable coal-to-waste stripping ratio of less than 1, the G12-grade mine is poised to be a cost-effective and sustainable energy source for the company’s operations, making the company self-reliant in coal production," the press release added.

Hindalco further said that the allocation of the Meenakshi mine aligns with Hindalco’s strategy to reduce operating costs and boost energy self-sufficiency. The mined coal will replace the company’s dependence on auction and linkage coal, which is currently estimated at approximately 40% higher than the Meenakshi coal mine, thereby ensuring a stable supply for its smelters and solidifying its position as one of the lowest-cost producers of aluminium in the world.

The company expects to commence coal production in CY2028, subject to receipt of regulatory clearances and requisite approvals.

"This milestone reinforces Hindalco’s commitment to sustainable practices, responsible mining, and its vision of contributing to India’s energy independence and industrial progress," it added.

Hindalco Industries Q2 FY25 Results

The company reported a 78% rise in consolidated net profit to ₹3,909 crore in the September 2024 quarter on the back of strong operational performance, favourable macros, and prudent cost management.

Total income during the quarter under review rose to ₹59,278 crore against ₹54,632 crore logged a year ago.

"Our India business delivered a strong operational performance in Q2 bolstered by our relentless focus on operational reliability and cost management," Hindalco Industries Managing Director Satish Pai said.

A 26 billion dollar metals giant, Hindalco is the world's largest aluminium company by revenues and the world's second-largest copper rods manufacturer (outside China).