In the financial year closing March 31, 2005, the Centre had approved a second phase expansion of Nalco at a cost of Rs 4091.51 crore (Rs 40.91 billion).
Nalco closed the fiscal 2004-05 with its highest-ever net profit of Rs 1222.43 crore (Rs 12.22 billion), recording an increase of 66 percent over the previous year's figure of Rs 737.37 crore (Rs 7.37 billion).
A tussle between the finance ministry and the ministry of mines is on the cards with the former having written a letter favouring divestment of 20 per cent government stake in National Aluminium Company and Mines Minister Sis Ram Ola opposing any such move.
In a letter written to the ministry of mines last month, the finance department asked the ministry to consider the proposal of divesting 20 per cent of the government's 87 per cent stake in Nalco.
However, Ola on Friday said he was against the proposal as the Nalco was performing well and there was need to add more strength to the company which made highest ever net profit of Rs 1222.43 crore in the just concluded financial year 2004-05.
C R Pradhan, Nalco chairman and managing director also echoed similar views saying "given a choice we will not favour divestment. The company is performing very well and it should be allowed to grow on its own."
"As far as further expansion is concerned, we can generate resources. It will not be a problem," he added. The mines ministry has so far not responded to the letter and has hinted at expressing its opposition to it.
"Every ministry is entitled to have it own views on a particular matter. The finance ministry supports divestment but we do not agree. We have so far not responded to it but when we do so, we will be against it," Ola said.
"We do not want to reduce the company's (Nalco) strength and we try that divestment in the company does mot take place," the minister added.
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