Q1. Could you start by giving us a brief overview of your professional background, particularly focusing on your expertise in the industry?

I have nearly 39 years of experience in the Mining and Metal industry. My professional experience includes 27 years in operations management of the Aluminium Smelter plant, including 5 years in a top management position at the Production units. I have nearly 12 years of experience in Business Development and Projects, which includes almost 3 years of Board directorship. 

  
Q2. How is the global push for decarbonization impacting project planning and operations in the aluminium sector?

Primary aluminium production is highly energy intensive. It is also considered to be one of the 'hard to abate' sectors as far as the green energy transition is concerned. Energy consumption in the three stages of aluminium production, i.e., Bauxite Mining, Alumina Refinery, and Aluminium production, is the key concern in the path to decarbonisation.     

As per International Aluminium Institute (IAI) data, average emission intensity from aluminium smelters globally in 2024 was 14.8t CO2 equivalent per tonne of metal. In aluminium production, emissions primarily come from process emissions (Scope-1 emissions) and the use of electricity (Scope-2 emissions). The source of electricity contributes nearly 90% to the carbon footprint of the aluminium sector. Specific emission intensity varies from 4t to around 20t CO2 equivalent based on the source of power. 

The focus areas to reduce emissions from aluminium smelter plants are – decarbonising power and reducing process emissions. Most of the global smelters with low carbon footprints are employing hydro-based energy sources to meet their requirements. In contrast, smelter plants in India are based on coal power. To decarbonise the source of power, Indian smelters, for that matter, smelters globally, are partially meeting their energy needs from renewable sources like wind, solar, etc. Solar/ wind/ hybrid with storage facilities are yet to be economically viable. Power producers are also installing Flue Gas Desulphuriser (FGD) as mandated by the statutory authorities to reduce the emission from the power plants. Once new technologies like Carbon Capture Utilisation & Storage (CCUS) mature, fossil fuel-based power will have significantly lower carbon emission.  

While emissions from power contribute significantly to the carbon footprint of aluminium production, improving process efficiency, thus reducing process emissions, is also a key aspect in the decarbonisation effort.  Average energy intensity for producing one tonne aluminium globally has come down nearly 17% over the last four decades (source: International Aluminium Institute) due to improvements in the aluminium production process over the years. Alumina Refineries like Alunorte in Brazil are replacing the fossil-fuel-based steam boilers with electric boilers for the production of process steam. Some refineries are also carrying out trials to use green hydrogen in their calciners to reduce carbon footprint. Industrial vehicles in the aluminium plants are also being replaced with battery-operated vehicles to lessen the environmental impact. Many emerging technologies, such as inert anode, wetted cathode, energy modulation, etc., are in different stages of development. These technologies, once commercially established, are likely to reduce the process emissions significantly. 

Thus, the selection of energy-efficient technology and machinery has become an essential activity at the project planning stage. The installation of additional facilities for emission reduction also affects the project cost and operating cost.     

Q3. How is the industry adopting digital tools like automation, AI, or digital twins in managing large-scale technical projects?

Large-scale technical projects are complex, and these projects typically follow four broad stages: project design & engineering, project construction, commissioning, and finally project close-out. Each stage also involves multiple interconnected and multi-functional activities. 
Mathematical modelling and digital twins are commonly used in the design stage of processes and machinery to predict the performance of the process and equipment. Project proponents and consulting agencies are also using AI tools to prepare and verify engineering drawings. Use of AI tools has made the process quick and error-free.  

The project construction stage involves the execution of multiple interconnected work packages using various resources, including labour, material, and equipment. Industries have started using AI tools for project scheduling, resource optimization, real-time progress monitoring, delay forecasting, project cost monitoring, real-time safety monitoring, etc. Integrated supply chain management also ensures the timely availability of materials with optimum inventory. Many of the project-related tasks are presently happening in silos without adequate data analysis and proper integration. Hence, the use of AI tools will significantly improve the process in terms of predictability and accuracy.       

An AI system assists in smooth project commissioning by comparing and validating the process and equipment performance parameters with the design parameters. It can also suggest corrective measures in case of deviations based on the past data. 
Training AI algorithms to manage projects will require large amounts of project-related data. The project close-out stage can provide the inputs to the AI system to build its database and enhance its learning. The project data generated during the project can be used effectively to train a machine learning model. The more information available to the AI tools, the greater will be the value of the outcome.

Currently in India, most of the Project Proponents and Project Management Consulting (PMC) firms in the aluminium sector are in the initial stages of data collection. However, all of them are preparing themselves for broader use of AI tools in project management in future.   

Q4. How is the overall market size of the aluminium industry expected to grow in the next 5–10 years, both globally and in India?

Unique properties of Aluminium, such as lightness, high strength-to-weight ratio, corrosion resistance, infinite recyclability, high thermal and electrical conductivity, non-toxicity, and impermeability, make it a metal of choice for many applications. 
Globally, aluminium consumption has grown at a CAGR of 4.3% from 46 MT in 2005 to 98 MT in 2023. In 2023, primary and secondary Aluminium contributed to 71% and 29% of the global demand, respectively. Global average per capita consumption of Aluminium is 12kg. As per a study conducted by CRU on behalf of the International Aluminium Institute (IAI), total aluminium demand is expected to grow to 119.5 Mt in 2030. 
In India, per capita aluminium consumption has remained low at 3.5kg compared to global average of 12 kg. However, aluminium demand is expected to grow many folds due to various favourable factors like strong economic growth, urbanisation, population growth and rise in affluence, government focus on infrastructure development, the transition to renewable energy sources, 'Make in India' initiative, Smart Cities, use of aluminium wagons, adoption of electric vehicles (EVs) etc. 

Aluminium consumption in India in FY24 was 4.95 million tonnes as per the 'Vision Document for Aluminium Sector' prepared by the Ministry of Mines, Govt. of India. India's per capita Aluminium consumption is projected to increase to 5.6 kg by FY30. Aluminium demand in India is forecasted to reach 8.5 million tonnes by 2030.

Q5. Which end-use segments—such as transportation, packaging, construction, or electronics—are showing the strongest growth potential for Aluminium?

Aluminium is finding application in almost all sectors. Makes it an essential commodity for almost all sectors. Globally, Building & Construction, Automotive & Transport, Packaging, Electrical and Electronics, Industrial Machinery, and Solar Energy remained the top end-user segments in 2024. As per the CRU Study done for IAI, key end-use segments that are expected to drive demand for Aluminium in 2030 are Transportation, Electrical & Electronics, Construction, and Packaging. 

As per the 'Vision Document for Aluminium Sector 2025 ', the key end-use segments for aluminium demand in India are expected to be the Electrical Sector, Transport and Construction, followed by Machinery & Equipment, Packaging, and Consumer durables in 2030 and beyond.  Accordingly, the downstream products that are showing the strongest growth potential for Aluminium in India are aluminium castings and wire rods, followed by FRP and extrusions.

Q6. How would you describe the current competitive dynamics in the aluminium industry — is it more driven by scale, technology, or sustainability?

The current and, for that matter, future competitive dynamics in the aluminium industry will be an interplay between all three factors, i.e., scale, technology, and sustainability. While scale does have a significant influence on the aluminium landscape, its impact is expected to remain unchanged at least in the short term. Availability of bauxite and cheap energy will continue to be the determining factors for locating the aluminium smelter plants. In the foreseeable future, China, India, and the Middle East are expected to continue as leading producers of Aluminium. Globally, secondary Aluminium has contributed 29% of the global demand in 2023. Secondary Aluminium is expected to grow at a faster rate compared to primary Aluminium as increased scrap recycling is a key lever for emission reduction. The International Energy Agency (IEA) forecasts that the share of secondary Aluminium production is expected to expand to 40% of total Aluminium production globally by 2030 in the net zero scenario (NZE).

There is a strong correlation between technology and sustainability in the aluminium industry. The majority of the technological innovations currently under development focus on reducing energy consumption, which in turn will also result in a reduction in emissions. The technological innovations like Inert Anode by Elysis (A JV between Alcoa and Rio Tinto) and Rusal, Wetted Cathode for aluminium production are in various stages of development. For alumina production, an electrical boiler for process steam generation, replacement of fossil fuel with green hydrogen for calcination, and mechanical vapour recompression for recovery of heat are also some of the exciting technological innovations that are presently underway. 
Considering the high energy intensity of Aluminium, electricity decarbonisation, i.e., shift to low-carbon electricity, electrification, green hydrogen, and Carbon Capture Utilisation & Storage (CCUS) is a key factor in the aluminium sector GHG pathway. Technological developments in Energy Storage System (ESS), CCUS, etc, will be crucial for electricity decarbonisation for the aluminium industry. Early adopters of these technological breakthroughs are expected to get the first mover advantage in cost as well as sustainability. 

Aluminium is both an essential input to several technologies critical to the energy transition and also a significant source of CO2 emissions. Many aluminium producers are currently producing low-carbon aluminium (popularly known as Green Aluminium, having a specific emission intensity below 4t CO2 equivalent per tonne of Aluminium) in limited quantities. Increasing demand for sustainable materials and stricter environmental regulations are expected to drive the market for green Aluminium. However, the aluminium industry needs to develop and deploy new technologies to meet the Net Zero Emission (NZE) scenario expectations.      

Sustainability in the aluminium industry goes beyond the production of low-carbon aluminium. Sustainable Aluminium needs to address its impact on water, land, flora, and fauna as well. Environmentally friendly reprocessing, recycling, or disposal of bauxite residue (also known as red mud), Spent Pot Lining (SPL), fly ash from coal-based power plants, recycling of water, control of fluoride emission, etc, are some of the key areas requiring equal focus in aluminium industries. In this context, the sustainability goal of Hindalco is worth noting, which targets to achieve Net zero, no net loss to biodiversity, zero waste to landfill, and water positive by 2050.

Green aluminum production may involve higher costs apart from the technological challenges compared to the traditional method, requiring consumers and industries to be willing to pay a premium for sustainability, as per a report titled 'Evaluating Net-zero for the Indian Aluminium Industry' by CEEW (Council on Energy, Environment and Water), transition to net zero Aluminium by Indian aluminium producers will involve significant capital investment and also require higher operating cost. The cost of net-zero Aluminium is estimated to be nearly 61% more expensive than conventional Aluminium.   

Q7. If you were an investor looking at companies within the space, what critical question would you pose to their senior management?

An investor interested in investing in companies in the primary aluminium space needs to find out the details about the business for an informed decision.

The critical questions that need to be asked should necessarily address the following aspects:

• Source of raw materials, particularly bauxite/ alumina and coal/gas – whether captive source or bought out? Residual life of the captive sources? If bought out, should supply security be in the form of long-term arrangements or dependent on the spot market? 
• Source of electricity – captive unit or through long-term contract? Source of fuel in case of a captive unit? 
• Status of the technology and machinery used by the company – modern and advanced or old and outdated?
• Cost competitiveness of the business in comparison with its competitors - whether it is in the top percentile in the cost curve? 
• Has it benchmarked its operations against global best practices? Where does it stand? Is it planning to achieve the global best efficiency parameters in its operations?
• Product mix – share of downstream products/ value added products (VAP) in total production? Revenue generation from new products vis-à-vis regular products?
• Companies market share? Global or local market footprint of the business?
• Growth plans of the company and where it stands to reach in the coming five years?
• Emission intensity of its operation - where does it stand in comparison to its competitors?
• What are the company's action plans to achieve the stated emission targets that are in line with government policies?

The list is indicative and limited to current business and future plans. An investor also needs to find the details about the financial, human resource, and commercial aspects as well for a complete understanding of the company. The above key factors are relevant for a primary aluminium business. However, for secondary Aluminium, which is essentially not a commodity business, different sets of questions need to be addressed, covering issues about the scale of the industry, scrap sourcing and processing, product mix, long-term marketing tie-up with customers, etc.