Budget 2023-24: Miners' body seeks withdrawal of export duty on bauxite

Miners' body FIMI has sought withdrawal of export duty on bauxite, stating that the move will lead to optimum utilisation of low-grade mineral resources as it will expedite reopening of closed bauxite mines, create jobs and earn foreign exchange.

Bauxite is the principal ore of aluminum and therefore the mineral is the essential raw material for aluminium producers.

"The export duty of 15 per cent on bauxite is detrimental to the Indian non- metallurgical bauxite producers and exporters...This Federation therefore request for complete withdrawal of export duty on exports of bauxite," FIMI said in its pre-Budget proposals to the finance ministry.

India, it said, is not only self-sufficient in meeting its requirement but has huge potential to be a major player in the international bauxite market.

Domestic alumina and aluminum producers have their own captive mines or meet their requirement from mines located in eastern and central parts of the country, which contain plant grade bauxite.

On the other hand, bauxite deposits occurring in the country's west coast (low in alumina content and high in silica) are technically not suitable and economically unviable for the refiners/smelters in the country.

However, such non-plant grade bauxite is accepted in certain countries on account of the paucity of the mineral and availability of technology for using low-grade bauxite.

Effectively, exporting the sub-par non-plant grade bauxite from the country's west coast leads to generating direct and indirect employment for more than 50,000 labourers, principally in the Jamnagar/Porbandar region of Gujarat.

It also leads to the vibrant economic ecosystem for local communities, stevedores and other related ancillary industries, FIMI added.

This generates revenue for the exchequer in the form of royalties, port dues, and taxes, besides contributing to earning of foreign exchange and reducing the skewed trade deficit.

Since availability of low-grade bauxite is much more than the domestic demand in the country, the same was being exported, particularly from Maharashtra and Gujarat coastal regions.

However, subsequent to imposition of export duty of 15 per cent on bauxite, the production and export of the ore has been adversely affected, it said.

Over the years, India fiercely competed with other bauxite exporting countries such as Australia, Guinea, Indonesia and Malaysia for the export market share. However, the export duty on bauxite has made outbound shipments unviable.

The Budget for 2023-24 is likely to be tabled on February 1.