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New gr puts 200 small bauxite players in lurch

Vimukt Dave  |  Mumbai/ Rajkot 

The small and medium bauxite players in Gujarat are seemingly left in the middle of nowhere as the new government resolution (GR) has kept the mining lease for the mineral reserved for a state run PSU.

As per the resolution, the units using bauxite for calcination and beneficiation purpose will not be given lease of the mineral and the state has close to 200 units that are solely dependent on this.

All bauxite mines will be reserved for Gujarat Mineral Development Corporation (GMDC) except for areas already granted for prospecting license or mining lease.The state-run BSE listed PSU will have the sole trading and export rights of the raw material in Gujarat. Besides, GMDC also aims to set up two alumina projects through joint ventures in the future.

However, the GR has made provision for giving mining lease to other players who are willing to establish unit in Gujarat for producing substantial value addition products from plant grade as well as non-plant grade bauxite be it refractories, castables, brown fused alumina, high grade alumina cement, alumina or al-chemicals.

"There are a handful of players with considerable capacities and financial support who can go for upgradation for value addition but what about the other hundred odd players," said a player who has bauxite calcination unit in Jamnagar.

The government on the other hand feels that the move will curb illegal mining activities in the state to a large extent.

“This is a death note for our industry. When you are talking about globalization how can you give power to a single body?” said Sailesh Raichura, Executive Director, Saurashtra Calcined Bauxite & Allied Industries Ltd based in Porbandar.

Industries involved in calcined bauxite production are spread across Jamnagar and Porbander districts with a supply spread across Gujarat, Maharashtra, Madhya Pradesh, Andhra Pradesh, Karnataka, Jharkhand,Orrisa, Tamil Nadu & Kerela. The industry gives direct employment to 5,000 to 7,000 people and indirect employment to 10,000. The turnover of the industry is about Rs 60 crore per month and production capacity is about 500 tones per day from small units.

When contacted a senior GMDC official said that they will ensure a regular supply to the calcined bauxite players. However, some players seem to have quality issues with GMDC.

“The new GR on bauxite of government of Gujarat will kill the mining industry of the state. More than 200 small units of will be shut down with the effect of this new GR. We do not want to buy bauxite from government as quality of GMDC product is not up to our satisfaction,” said Padubhai Raichura, President of Porbandar District Chamber of Commerce and Industries.

The state government has passed the resolution keeping in mind the illegal mining activities that have become rampant in Gujarat a couple of years ago. A special task force has been formed to curb the illegal mining activity in the state.

"Many players had applied for mining lease under the pretext of setting up a calcination plant. However, instead of using plant grade bauxite, the government found that they were carrying out illegal mining of non-plant grade for export purpose," said a government official privy to the development.

In 2007-08 fiscal over Rs 1,000 crore worth of the mineral is learnt to have been exported from various ports Saurashtra.

First Published: Mon, December 14 2009. 00:43 IST