From its previous close of Rs.32, Nalco today opened at Rs.33 and went on to an intraday high at Rs.34.40, very close to its 10% UC of the day at Rs.35.20.
The company announced yesterday morning that it has received the Govt’s approval for lease agreement of Utkal-D Coal Block.
This Block is spread over an area of 301.28 hectares under Chendipada Tehasil of Angul District.
The Utkal-D Coal Block was allocated to the company in May, 2016 which has initial capacity of 2 million tonnes per year with a total mineable reserve of 101.68 million tonnes.
This is very good news for Nalco as captive coal production can cut aluminium smelting costs by 25%.
The company is also stated to be in looking at getting approval for the adjacent coal block, Utkal E. If the Govt nod does come through, these two blocks can give Nalco a combined coal output of 4 mtpa.
The company had posted losses in Q2 as well as Q3 as coal supplies from Coal India fell, thereby impacting its operations. Thus having its captive coal supply will mitigate this risk of depending on Coal India.