Mining industry seeks export duty waiver on non-metallurgical grade bauxite

Non-plant grade bauxite isn't used in aluminium smelters that go for higher grades. With little demand in the domestic market, miners of non-plant grade bauxite usually take recourse to exports

Mining lobby body, the Federation of Indian Mineral Industries (Fimi), has pitched for exemption of the existing 15 per cent duty on exports of non-metallurgical grade bauxite.

Non-plant grade bauxite does not find applications in aluminium smelters that consume higher grade material. With no demand to absorb in the domestic market, the miners of non-plant grade bauxite usually take recourse to exports.

But since 2015-16, exports of the baser grade bauxite have been on a downhill. From 8.91 million tonnes (mt) in 2015-16. export volumes has slumped to 1.40 mt at the end of 2018-19.

“With a view to have optimum utilization of our low grade mineral resources, it is imperative that the duty imposed on export of bauxite be withdrawn which will lead to reopening of closed bauxite mines, employment restoration besides earning of foreign exchange”, Fimi said in its pre-Budget proposal.

India has ample availability of inferior grade bauxite- the production of the mineral ore trumps the domestic demand. Low grade bauxite is mostly mined in Gujarat and Maharashtra. Besides effective utilization and conservation of the mineral resource, exports of low grade bauxite has helped the country in amassing foreign exchange. But due to levy of 15 per cent export tax, India's low grade bauxite have become unviable for the producers in international trade, leading to shrinking volumes in outbound shipments.

India has huge repository of bauxite resources. The country with about 3480 million tonnes of proven bauxite deposits, ranks fifth in the world. Eighty four per cent of the bauxite is of metallurgical grade used for refining into alumina and subsequent extraction of aluminium by smelting the intermediate product (alumina). Though large capacities of aluminium smelters have been installed to tap the plant grade bauxite, the non-metallurgical variety is almost stranded with minuscule avenues. The scenario is pronounced in Gujarat; the state primarily produces low grade bauxite containing alumina in the range of 38-40 per cent and silica beyond five per cent.

Low grade bauxite from India is mainly shipped to China where aluminum smelters blend it with superior quality ore sourced from Australia. As India's low grade bauxite imports are on the wane, Australia and Malaysia are contributing more to China's import basket.