Tax hike on bauxite export unnecessary, says FIMI

Says it will only lead to stacking of mineral in the country

The mining lobby body Federation of Indian Mineral Industries (FIMI) has criticised the recent announcement by Union government to raise duty on bauxite exports, saying it will only lead to stacking of the mineral in the country.

"India does not export high grade bauxite. We export inferior quality bauxite mainly from west coast which is used primarily in refractories and for non-aluminium making purposes as there are no takers for the material in domestic market. The hike in taxes will only lead to piling up of the low grade bauxite," said R K Sharma, secretary-general of FIMI. Apart from Alumina, many chemical, refractory and cement industries use bauxite as a raw material and such industries abroad source the material from India.

As per the latest decision, export duty on bauxite has been revised to 20 per cent, from 10 per cent earlier. Last year, the duty was raised to 10 per cent from initial proposal of five per cent. India exports annually about 300,000 tonne bauxite from Maharashtra and Gujarat. These are exported mainly to West Asian nations and China. The total bauxite resource in India is estimated at 3,290 million tonnes (mt). India occupies sixth place in the world with a share of 3.19 per cent of world reserves.

Aluminium industries, however, welcomed the decision to raise export duty on bauxite shipments.

"This will create more revenue for the government and is a relief to domestic industries," said K K Dave, chief operating officer with Sesa Sterlite, Odisha unit. Sesa Sterlite has been struggling to run its alumina refinery in Kalahandi district following denial of access to Niyamgiri deposits of Odisha Mining Corporation (OMC) on environmental issues.

In absence of Odisha supply, it has been sourcing the mineral from Gujarat and also through imports to produce alumina at Lanjigarh refinery at a reduced capacity.