India’s independent bauxite miners have urged the government to exempt the aluminium raw material from export duty due to a lack of demand from domestic aluminium producers.
Though the export duty on bauxite was reduced by 5% to 15% in the last Union Budget, yet the levy makes Indian exporters uncompetitive in the global markets. In fact, the government in the Budget 2016-17 exempted low grade iron ore and chromium ore from export duty from their uniform high level of 30%.
“In the last budget, custom duty on export of iron ore lumps and chromium ores was reduced from 30 per cent to ‘nil’ but the same on bauxite was reduced from 20 per cent to 15 per cent only, which was inadequate. This relief may be too little, too late, to rejuvenate the bauxite export industry, which is already battling headwinds from the meltdown in the global commodity markets. Therefore, custom duty on export of bauxite ore should be reduced to ‘nil’,” said C K Joshi, Chairman of Gujmin Industry Association, the representative body of mineral excavators in Gujarat.
India has three billion tonnes of bauxite reserves. With around 2 million tonnes of annual aluminium production and remote chances of further large addition in production due to subdued price trend and huge cost involved, the known bauxite reserves is estimated to last for more than 300 years.
More than 80% of India’s bauxite reserves are located in Odisha and Andhra Pradesh, which explains why nearly all of the integrated alumina and aluminium plants with copious captive bauxite reserves are situated in east and central regions of the country. The west coast of India is peppered with non-contiguous deposits of bauxite, none of which have the quality or the critical mass to support an alumina refinery or an integrated smelter.
China has may other sources for importing bauxite namely Malaysia, Australia and Guinea. Indian Bauxite comprises only 14% of the Chinese bauxite import requirements and is on a weaker wicket as compared to other competing countries mainly on account of a disproportionate export duty and dwindling quality.
India is estimated to have exported around 7 million tonnes of bauxite largely to China in calendar year 2015. But, the exports are dwindling because of export duty which makes India uncompetitive in Chinese markets.
“Because of export duty mismatch, the livelihood of around 50,000 workers employed in this business is at stake. To protect the interest of these labourers, therefore, the government must abolish export duty on bauxite,” a senior official of one of miners said.