Hike Capacity In Copper Industry
Abolition of industrial licensing, cutting down of excise duties and approval of foreign equity up to 51 per cent in the aluminium sector will definitely aid the industry, said S P Shorewala, president, Indian Non-Ferrous Metals Manufacturers' Association, in an interview with Devendra Vyas. Excerpts:
How is the aluminium industry going to perform in the future?
Our country is not only self sufficient but is also exporting alumina, aluminium and down-stream products such as sheets, coils etc. Domestic production of aluminium during the financial year 1999-2000 was 617,437 tonne compared with 545,782 tonne in 1998-99. Though India exports alumina and aluminium, it also imports aluminium, particularly electrical grade metal, against duty-free import licences for manufacture of conductors to be supplied to World Bank-aided projects. The country also imports aluminium scrap because of concessional import duty compared with that of aluminium metal. Aluminium consumption in the country is growing at the rate of seven-eight per cent annually. The growth prospects for the sector are bright as the country has got enough alumina and coal required for production.
What is the present trend in aluminium prices at the London Metal Exchange (LME)?
LME prices for aluminium, which had fallen as low as $1,141 per tonne in March 1999, went up to $1,740 per tonne and are now ruling at around $14,50 per tonne. We expect the average LME price for aluminium to be above $1,600. The demand from China will have an impact on LME price on the upper side.
How is the domestic copper industry performing?
Due to a rise in domestic copper production, imports of the metal are showing a downward trend. Import of copper scrap has gone down substantially. LME quotation for copper was at $1,764 per tonne in December 1999 , while currently it is ruling at around $1,780 per tonne.
The country's copper production during the financial year 1999-2000 was 231,382 tonne as against 136,032 tonne in 1998-99. Domestic production of copper has been falling short, while demand is going up. According to the Ninth Five Year Plan, the demand for copper is rising at an annual rate of six-eight per cent. There are plans to expand capacity by around 50,000 tonne by Birla Copper, while public sector Hindustan Copper has plan to hike it by 14,000 tonne to 64,000 tonne.
However, unless the installed capacity for the copper industry expands at a faster rate, imports to the tune of 1.50-1.75 lakh tonne may be needed annually. It might be interesting to note that per capita consumption of refined copper in India is at around 0.30 kg per year, while the world average is 3.6 kg and the advanced country average is at around 10 kg.
According to an estimate, the domestic demand for copper may rise to 5,20,000 tonne in 2001-02 and further 750,000 tonne in 2006-07. This calls for considerable additional capacity addition.
What is the government's stand on the non-ferrous metal industry?
The government is quite co-operative and helpful towards the development of non-ferrous metals like aluminium, copper, lead and zinc. The government has got its own copper, aluminium and zinc plants. This will increase the production of these metals. India has lost around 10-15 years without any development in the non-ferrous metals industry. Up to 1988-89, domestic availability of aluminium was limited due to lower capacity utilisation, non-availability of power and factors like licensing of capacity expansions etc.
Decontrolling of the aluminium sector in 1989 has really helped in the expansion of the industry. Abolition of industrial licensing, cutting down of excise duties and approval of foreign equity up to 51 per cent in the aluminium sector will definitely aid the industry.