“COVID-19” effect: FIMI urge Govt. of India to abolish export duty on non-metallurgical grade Bauxite

FIMI, the mining body of India, stated that as COVID-19 has hit all sectors, so they have urged the government of India to remove the 15% export duty on non-metallurgical grade bauxite. The shipments of this grade bauxite can bring in additional revenues for the exchequer.

Federation of Indian Mineral Industries (FIMI) stated in a letter to Finance Minister of India, Mrs Nirmala Sitharaman: "The spread of COVID-19 pandemic has created an extraordinary 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.”

The plant grade bauxite is consumed for manufacturing of refractories, abrasives, monolithic, specialized alumina, and cement, among others; whereas, non-plant grade bauxite is consumed in sectors like aluminium metal extraction, cement industries and manufacturing of zeolites.

The dominant market for export of bauxite from India has been China, but owing to the export duty of 15%, the landed cost of Indian bauxite in China works out to be much more expensive than that of other countries like Indonesia, Malaysia and Guinea.

The result of this due process made India lose the dominant export market share in China which has now been seized by countries like Indonesia, Australia and Guinea. The quality of bauxite of these stated countries is much superior to the Indian western coastal bauxite. Furthermore, due to the sharp decline in the quantum of export of bauxite, the country is losing heavy foreign exchange besides massive job losses.

FIMI said: "Considering that low-grade bauxite (non-plant grade bauxite) is unsuitable and uneconomical for the consumption of the domestic aluminium industry and 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of our low-grade mineral resources, we request that the export duty imposed 15% on exports of bauxite may kindly be withdrawn completely.”

There is a need to have optimal conservation of these bauxite deposits because of the huge resources available in the country.

While large capacity aluminium smelters have been commissioned for utilisation of metallurgical grade of bauxites, as such there are only very limited avenues for the non-plant grade (mainly low-grade bauxite) particularly occurring in Gujarat and Maharashtra. India is not only self-sufficient in meeting its requirement but has huge potential to be a major player in the international bauxite market.

FIMI also added: “All of India's alumina and aluminium producers have their captive mines or meet their requirement from mines located in the 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.”

However, such non-plant grade bauxite is accepted in certain countries on account of the insufficiency 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.

FIMI concluded: “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)”