``A major factor for considering India as a favoured location to build greenfield alumina refining and aluminium smelting plants is the presence of vast reserves of bauxite,'' he said yesterday in his address at the Indian Metals Conference being organised by the London Metal Exchange here.

Indian bauxite was `gibbsitic' in nature requiring low temperatures or low pressure dilution and thereby reducing the operating costs and increasing profit margins, Ghosh said.

National Aluminium Company's (NALCO) cost of producing one tonne of alumina at US $81 was much lower than the world average cost of US $149.9 per tonne.

Moreover, the abundant reserves of high ash low sulphur coal in India facilitates the setting up of captive thermal power plants forsmelters that ensure lower cost and reliability, he said.

While older plants may require reorientation of existing manufacturing processes, greenfield plants would definitely be cheaper producers across the globe, Ghosh added.

The existing low per capita consumption of aluminium at a mere three per cent of the global average portends tremendous growth potential in the coming years, Ghosh said.

With no new large-scale capacities expected in the next two years, the shortfall in the metal by the turn of the century was likely to cross 100,000 tonnes, he stated, adding ``it is unfortunate that India having a strong resource base in bauxite has not been able to inspire growth in aluminium production capacity in the country.''

Production has grown at a slow pace from 4,045 tonnes in 1950-51 to 533,000 tonnes in 1997-98 mostly due to the high capital cost of setting up aluminium projects.

Commenting on the end-user composition of aluminium in the country, Ghosh said it was distinctly different from theglobal end-use composition.

While demand in the west was evenly distributed across the usage sector the same was not true for India on acccount of the Aluminium Control Act, high prices and increased availability of substitutes, he said.

In India, the electrical sector accounts for nine per cent, transport sector is the largest at 25 per cent of consumption. The aluminium production process requires large amount of electricity in smelting and given the high costs of power, it acts as an entry barrier for smaller players to operate, Ghosh added.