Mumbai | April 4, 2016: The low grade bauxite exporters from Gujarat have urged the Centre to remove customs duty of 15 per cent as it was done in the case of iron ore in the recent Budget.
Inferior bauxite ores available in Gujarat and Maharashtra are not useable by domestic metal manufacturers as it has low alumina and high silica content. About 80 per cent of India’s bauxite reserves are in Odisha and Andhra Pradesh where the integrated alumina and aluminium plants are located.
The Union government made iron ore exports duty free from earlier level of 30 per cent in the Budget.
A few small mine owners and export aggregators in Gujarat over the decade have taken initiative to find a market for the inferior ore and succeeded in developing a sustainable “mining industry” which generates direct and indirect employment to over 50,000 people.
China, which imports low grade bauxite from India, blends it with good quality ore imported from Australia and other countries.
CK Joshi, Chairman, Gujmin Industry Association, said Chinese refineries have configured their plants to use different blends of bauxite due to lack of domestic supply and the low energy cost partially make up for the high production cost.
While Australia increased its bauxite export to China by 27 per cent to 19.14 million tonnes (15.04 mt) in 2015, India’s export was up 14 per cent to 7.42 mt.
Malaysia’s shipments were up about seven times to 22.36 mt (2.82 mt).
The sharp rise in Australia and Malaysia’s export to China was largely due to fall in India’s share, said Joshi.
The Union government has done well to abolish duty on iron ore lumps and chromium, but for reasons unknown restricted the cut on bauxite to 15 per cent from 20 per cent, he said.
The ‘relief’ was too little too late to resurrect the bauxite export industry which is battling headwinds from meltdown in global commodity markets, he said.
“Any way, Chinese companies are making massive investments into Guinea (West Africa) which holds the largest bauxite reserves in the world.
“In the long-run, the writing is on the wall for bauxite exporting countries including India,” he said.
(Source: http://www.thehindubusinessline.com/)