Hindalco Eyes Oswego Plant Restart by Next Week Amid Encouraging Copper Exploration

Hindalco's US Venture Novelis to Restart Oswego Plant by Next Week

Hindalco Industries' managing director and chief executive officer Satish Pai announced on May 25 that the Aditya Birla Group's aluminum and copper company's US venture Novelis is planning to restart operations at its Oswego plant in New York state by next week. The plant, a key supplier to the US auto sector, was forced to shut down after two fires in 2025, impacting cash flows by $1.7 billion.

The fires affected the plant's hot mill, finishing lines, and other parts. To mitigate the losses, Hindalco is meeting a part of the repair costs through insurance claims, while the company also invested around $1 billion in Novelis to support the restoration and other projects. The disruption had a significant impact on Hindalco's earnings for the March quarter, which were dragged down by Novelis, both from the fires and trade disruptions such as tariffs.

The restoration of supplies from Oswego will provide confidence to Novelis' customers, including Ford Motor Company, which experienced supply bottlenecks during the plant's damage and restoration phase. Besides Oswego, the upcoming commissioning of Novelis' $5 billion greenfield facility in Bay Minette, Alabama, will provide further certainty to automotive firms, according to Pai.

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The upcoming facility will make Novelis the only company in North America with three hot mills, providing a significant risk mitigation advantage for its customers. Pai added that the West Asia conflict, which led to a surge in oil prices, impacted costs by around 2.5 percent on a sequential basis in the March quarter. Costs have risen by a further 5 percent since in the ongoing quarter, primarily due to Hindalco's consumption of furnace oil and calcinated petroleum (CP) coke.

In India, Pai said that shortages in some sectors such as can sheets for beverage makers due to supply disruptions from the Gulf states will be a "distant memory" as the company scales up its flat rolled product (FRP) facility in Odisha that can supply 50 kilotonne (KT) of can sheets. Due to limited domestic capacity, as well as disruptions in supply of can sheets from the UAE and other countries, bottlers of popular products such as Diet Coke and multiple beer brands continue to face a supply crunch.

Copper exploration has turned out to be a major driver of earnings for Hindalco, driven by high demand and a persistent supply shortage, despite declining treatment and refining charges. Pai added that while India remains dependent on imports of copper ore, exploration in the company's allocated blocks in central India have been encouraging and supply from those mines will help reduce import dependence to some extent.

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The company aims at generating EBITDA of around Rs 600 crore-Rs 700 crore per quarter from the copper segment, driven by strong demand for sulphuric acid, a key input in the refining process of copper, as well as copper demand.