Bauxite is the main raw material for manufacturing aluminum and India is endowed with abundant quantities of high quality bauxite. Furthermore, bauxite mining is comparatively cheaper in India. Producers like Nalco and Hindalco who have their own captive mines and captive power facilities are the lowest cost producers of aluminum in the world.

The two major energy consuming steps in the production of aluminum are conversion of bauxite to alumina (Bayers process) and production of aluminum from alumina through smelting (Hall-Heroult process). Smelting accounts for more than 90% of the electricity consumption. Besides electricity, major energy inputs are coal and fuel oil, which are used mainly for heat generation. Two types of cells are used in the Hall-Heroult process, those with multiple prebaked anodes and those with self- baking or Soderberg anodes. Presently, both these technologies are in use.

 Energy Consumption

 *Sources: Asian Development Bank, Institute of Economic and Market Research