Indian government asks state-run NALCO to re-think Iran smelter unit plan

NEW DELHI (Reuters) - India's government has asked state-controlled National Aluminium Co Ltd (NALCO) to re-think its overseas expansion plans including a proposal to set up a $2 billion smelter unit in Iran, a top official said on Wednesday.

"Value addition should happen in India and we should be self sufficient in aluminium instead of importing by setting up plants overseas," Mines Secretary Balvinder Kumar told Reuters. "We have asked them to expand their domestic capacity."

The secretary said the final decision would be taken by NALCO's board on the Iran project. Repeated calls to the company's chairman were not answered.

Earlier in May, the state-owned company had entered into an initial agreement with Iran's mining development body to supply alumina from its refinery in India to set up an aluminium smelter in Iran.

NALCO had also explored setting up a 500,000-tonnes-per-year smelter and an associated power plant in the Middle East.

(Reporting by Neha Dasgupta and Krishna N. Das; Additional reporting by Jatindra Dash; Editing by Christian Schmollinger)