Mines ministry's push to protect interest of aluminium makers

Share of domestic producers in the market has dropped drastically to 45% in 2014-15 from 60% in 2010-2011

Waking up to concerns of domestic aluminium makers hit hard by cheaper imports, the Union mines ministry has nudged the ministry of finance to protect their interests.

“Currently, the aluminium industry is facing a huge stress. We are requesting the finance ministry to take up certain issues to protect the interest of the aluminium industries”, said Union mines secretary, Balvinder Kumar. Faced with spurt in imports of aluminium metal from China and West Asian nations and plummeting LME (London Metal Exchange) prices, aluminium producers have demnded hike in import duty of the metal from five per cent to 10 per cent.

With a surge of more than 1.5 million tonne per annum (mtpa) in import of aluminium to the country, the share of domestic producers in the market has dropped drastically to 45 per cent in 2014-15 from 60 per cent in 2010-2011.

The performance of the domestic players was also marred by sharp rise in coal prices that have seen spike of 24 per cent in the past three years. Besides, the domestic aluminium producers did not enjoy any government subsidy and were increasingly dependent on alumina imports.

Rise in aluminium imports are further delaying expansion plans of companies like Vedanta whose 1.25 million tonne per annum (mtpa) aluminium SEZ (Special Economic Zone) is lying idle for want of raw material. Moreover, the operational viability of Vedanta's smelter (at Jharsuguda) was at stake due to heavy dependence on alumina imports, no local source of bauxite, increase in input costs and record fall in LME aluminium prices from $2200 to $1620 per tonne in the last one year.

Private aluminium manufacturers had invested approximately !1.2 lakh crore in the last 10 years with a target of taking primary aluminium production from 2.1 mtpa to 4.1 mtpa.