The delayed alumina refinery joint venture of Ashapura Minechem Ltd. and Qingtongxia Aluminium Group, China's second largest aluminium maker, will at last begin construction in November, the Indian partner said.

Ashapura expects building works for the one million tonne per year unit in the western state of Gujarat to be completed 32 months later, Sandeep Nadkarni, its manager for finance and strategic planning, told Reuters.

"Delay in starting the project helped us," Nadkarni said on Friday. "Our balance sheet got stronger. We now have enough internal accruals to fund a substantial part of the equity portion."

The venture, he said, had obtained most approvals and would be getting the remaining minor ones by October. It had also resolved litigations that had delayed the project by about 18 months, Nadkarni added.

The 25-billion rupee alumina refinery was conceived about two years ago, marking the Chinese firm's first investment in alumina, the main raw material for aluminium production.

The project, Nadkarni said, was being funded with debt of 17 billion rupees and equity of 8 billion rupees, equally split between the partners.
The debt portion was yet to be tied up and company officials were in talks with Chinese and Indian bank officials. A detailed feasibility report is being prepared by Chalieco of China and Indian engineering and consultancy firm MECON Ltd.

BID FOR BAUXITE MINES

Nadkarni said Ashapura Minechem would get a bauxite mine in the Kutch region of Gujarat, but was seperately eyeing mining leases in several Indian states.

"We are close to acquiring 600 acres of bauxite baring leases in Kerala," but also pursuing opportunities in Karnataka and Orissa, he said.

"These are pocket reserves, not huge reserves," Nadkarni said adding the sites would have the potential to be mined for exports or value addition.

Shares in Ashapura hit a one-year high of 262.95 rupees in the Mumbai market and were trading 3.4 percent higher at 257 rupees.