Need to curb aluminium imports to realise domestic potential: FIMI

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August 21, 2020 5:11 PM

The Indian aluminium industry has made huge investments to the tune of Rs 1.2 lakh crore to enhance domestic production capacity from 2 MTPA to 4.1 MTPA to cater to the country's growing aluminium demand.

India is a leading player globally in terms of aluminium production, with second largest output capacity.India is a leading player globally in terms of aluminium production, with second largest output capacity.

Miners’ body FIMI on Friday said the country needs to curb aluminium imports and facilitate tapping of “rich and almost inexhaustible” domestic resources by local players in line with the government’s self-reliance vision.

The domestic consumption of aluminium is expected to reach 10 million tonnes (MT) by FY2031-32 and to meet the future demand, India needs to increase bauxite production from 23 MT in FY19 to approximately 70 MT by that time and corresponding alumina production from 7.4 MT to 20 MT, the Federation of Indian Mineral Industries (FIMI) Vice President R L Mohanty said at a webinar.

India is “favourably endowed with rich and almost inexhaustible resources of bauxite”, which is the main raw material for the production of aluminium, he added.

“However, despite having huge domestic demand and sufficient domestic aluminium capacity, 60 per cent of the India’s consumption is being imported, resulting in forex outgo… Rising imports of aluminium need to be restricted in order to promote domestic production,” Mohanty said.

Along with this, to facilitate the mining regime for bauxite, the allocation of coal blocks can be ensured to already operating aluminium industry in the country, he said during the webinar on ‘Leveraging Indian bauxite and aluminium industry for Aatmanirbhar Bharat’.

India is a leading player globally in terms of aluminium production, with second largest output capacity.

India has a significant primary aluminium capacity of 4.1 million tonnes per annum (MTPA) with downstream processing capacity of 3.9 MT, which lays a conducive platform for scaling up and leveraging the country’s natural resources, Mohanty said.

The Indian aluminium industry has made huge investments to the tune of Rs 1.2 lakh crore to enhance domestic production capacity from 2 MTPA to 4.1 MTPA to cater to the country’s growing aluminium demand.

Most resources of bauxite are concentrated in the East Coast Bauxite deposits in Odisha and Andhra Pradesh followed by other states like Madhya Pradesh, Gujarat, Chhattisgarh, Maharashtra and Jharkhand.

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

India is fortunate to have about 3,896 million tonnes of bauxite resources as on April 1, 2015, placing it on the sixth position in the global ranking.

In view of huge resources available in the country, there is a need to have optimal conservation of these bauxite deposits, he noted.

While large capacity aluminium smelters have been commissioned for utilisation of metallurgical grade of bauxites, but there are only very limited avenues for non-plant grade bauxite, the FIMI vice president said.

One of the greatest concerns is the high incidence of export duty being charged on export of bauxite including non-plant-grade bauxite which has made bauxite export unviable from western India, Mohanty explained.

The quantum of exports of bauxite, which peaked to 8.91 million tonnes in the year 2015-16, sharply declined to meager 0.50 million tonnes during 2019-20.

Export of bauxite leads to direct and indirect employment generation as also the socio-economic development of local communities, stevedores and other related ancillary industries, he added.

Needless to say, this generates revenue for the exchequer in the form of royalties, port dues and taxes besides contributing to earning of foreign exchange and helping in reducing trade deficits, Mohanty said.

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