Stating that the COVID-19 pandemic has hit all sectors, mining body FIMI has urged the government to withdraw the 15 per cent duty on export of non-metallurgical grade bauxite as its outbound shipments can bring in additional revenues for the exchequer.
"The spread of COVID-19 pandemic has created extra-ordinary and unprecedented situation in the country impacting mining of all minerals including production and exports of bauxite from the state of Gujarat and Maharashtra....
"...under the current critical situation the export of non-plant grade bauxite can play a vital role in bringing additional revenue to the country's exchequer," Federation of Indian Mineral Industries (FIMI) said in a letter to Finance Minister Nirmala Sitharaman.
Plant grade bauxite is consumed for manufacturing of refractories, abrasives, monolithic, specialized alumina, cement, among others.
Non-plant grade bauxite is consumed in sectors like aluminium metal extraction, cement industries and manufacturing of zeolites.
The main market for export of bauxite from India has been China.
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However, owing to the export duty of 15 per cent, the landed cost of Indian bauxite in China works out to be much more than that of other countries like Indonesia, Malaysia and Guinea, the letter said.
In the process, India has lost major export market share in China which have now been captured by countries like Indonesia, Australia and Guinea whose quality of bauxite is much superior than the Indian western coast bauxite.
Further due to sharp decline in the quantum of export of bauxite, country is losing heavy foreign exchange besides massive job losses.
"Considering that low-grade bauxite (non-plant grade bauxite) is unsuitable and uneconomical for the consumption of the domestic aluminium industry and with a view to have optimum utilization of our low-grade mineral resources, we request that the export duty imposed @ 15% on exports of bauxite may kindly be withdrawn completely," FIMI said.
In view of the huge bauxite resources available in the country, there is a need to have optimal conservation of these bauxite deposits.
While large capacity aluminum smelters have been commissioned for utilisation of metallurgical grade of bauxites, as such there are only very limited avenues for non-plant grade (mainly low-grade bauxite) particularly occurring in Gujarat and Maharashtra, it said.
India is not only self-sufficient in meeting its requirement but has huge potential to be a major player in the international bauxite market.
All of India's alumina and aluminum producers have their own captive mines or meet their requirement from mines located in eastern and central part of the country, which contain plant grade bauxite.
"On the other hand, the bauxite deposits occurring In India's west coast...are technically not suitable and economically unviable for the Indian refiners/smelters," it said.
However, such non-plant grade bauxite is accepted in certain countries on account of the paucity of bauxite and availability of technology for using low-grade bauxite.
"Effectively, exporting the sub-par non-plant grade bauxite from India's west coast leads to generating direct and indirect employment to more than 50,000 labourers (principally in the Jamnagar / Porbandar region of Gujarat, and also leads to the vibrant economic ecosystem for local communities, stevedores and other related ancillary industry,"it said.
Needless to say, this generates revenue to the exchequer in the form of royalties, port dues, and taxes besides contributing to earning of foreign exchange and helps in reducing the skewed trade deficit.
The quantum of exports of bauxite, which peaked to 8.91 million tonnes in the year 2015-16, sharply declined to a meagre 0.50 million tonnes during the year 2019-20 (April-January), it said.
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