Japan's Mitsui plans investment in AM Green’s low-carbon aluminium push

NEW DELHI: Backed by the founders of Greenko, AM Green has signed a memorandum of understanding (MoU) with Japan’s Mitsui & Co for strategic collaboration on energy transition initiatives and potential investment pathways in low-carbon aluminium, the company said in a statement on Thursday.

“Under the MoU with Mitsui, the parties will assess potential investment in the AM Green Metals value chain. Mitsui’s investment will support equity requirements to build the world’s first integrated green aluminium production platform,” the statement said.

The partnership is part of AM Green’s $20 billion capex strategy, under which it is converting electrons into metals and molecules. The proposed investment amount was not specified.

AM Green, through its wholly owned subsidiary AM Green Aluminium Metals and Materials (AM Green Metals), is building a 1 million tonnes per annum (mtpa) primary aluminium smelter along with 2 mtpa of alumina refining and mining operations.

Both the smelter and the refinery will be powered by renewable wind and solar energy, firmed up with pumped hydro storage, producing green aluminium products. Last month, AM Green signed agreements with the Andhra Pradesh government for projects worth ₹54,000 crore, of which ₹44,000 crore will be directed towards the 1 mtpa aluminium plant.

Under the MoU, Mitsui will evaluate potential investment opportunities across the AM Green Metals value chain. The two companies will also explore offtake arrangements for low-carbon aluminium, as well as the supply of auxiliary materials for the green aluminium smelter and alumina refinery.

“AM Green is building globally competitive platforms across molecules and materials to enable industrial decarbonization at scale. We are pleased to partner with Mitsui to explore collaboration pathways that can accelerate low-carbon aluminium and expand market access for a wider set of green products,” said Mahesh Kolli, founder, Greenko Group & AM Green.

This development gains significance as several developed economies, including the European Union through its Carbon Border Adjustment Mechanism (CBAM), plan to impose carbon taxes on imports, introducing stricter compliance norms.

Earlier this year, global mining major Rio Tinto and India’s AMG Metals & Minerals signed an MoU to establish the world’s largest renewable-powered aluminium facility in India, with an investment of about $6 billion. In May, state-run Coal India Ltd signed an MoU to supply 4,500 MW of renewable power to AM Green’s green ammonia facilities.

India’s energy transition agenda has been attracting global investors. AMG Metals & Materials is a subsidiary of AM Green, founded by Greenko Group founders Anil Chalamalasetty and Kolli.

India is the world’s second-largest aluminium producer after China, exporting both the commodity and derivative products to the US and the EU. The country’s aluminium market currently produces around 5 million tonnes per annum. Companies in the steel and aluminium sectors are actively exploring ways to decarbonize operations and remain competitive globally.

AM Green is also establishing production facilities for green molecules, including green hydrogen, green ammonia, biofuels, e-methanol, sustainable aviation fuels, and other downstream high-value chemicals aimed at decarbonizing hard-to-abate industries.

In September last year, AM Green Ammonia B.V., another AM Green entity, partnered with Germany’s RWE Supply & Trading to supply green ammonia. In January this year, AM Green collaborated with global logistics major DP World to set up advanced logistics and storage infrastructure for green hydrogen and green ammonia exports.

Mint previously reported that Malaysia’s Gentari Sdn Bhd and Singapore’s GIC Holdings Pte Ltd plan to invest $1.75 billion in AM Green Ammonia Holdings, marking one of the world’s largest energy-transition deals.

Chalamalasetty and Kolli have positioned AM Green as a new energy transition and decarbonization platform. The company is committed to building 5 mtpa of green ammonia capacity by 2030 (with 1 mtpa under construction), representing one-fifth of India’s green hydrogen production target and 10% of Europe’s green hydrogen import target.

The market for green aluminium is expanding amid global efforts to curb climate change. A report by JMK Research, released in April, projected that India’s aluminium sector will require 18-20 GW of solar and wind capacity by 2030, necessitating an estimated $5 billion in investment.