FICCI urges Centre to ban bauxite exports

FICCI urges Centre to ban bauxite exports

Trade body Federation of Indian Chambers of Commerce and Industry (Ficci) has urged the Union ministry of commerce and industry to ban bauxite exports fearing closure of alumina refineries for shortage of the key raw material required to produce alumina.

“India has a large and developed aluminum industry. But the industry is today is at cross roads primarily owing to severe shortage of raw materials, forcing plant closure and jeopardizing employment”, Arnab Kumar Hazra, Director, Ficci wrote to SR Rao, Union Commerce Secretary.

The exports have increased substantially in the last 2-3 years.

Currently many bauxite mine lease holders mainly from the western part of India are exporting bauxite which in turn is creating scarcity of bauxite in the country, he pointed out.

Hazra urged the centre to review exports of bauxite from India and take steps either by way of levying of a higher export duty or put ban on it.

The move from the chamber comes few days after Vedanta Aluminium Ltd (VAL), which is struggling to run its one million tonne alumina refinery at Lanjigarh in Kalahandi district in full capacity, had requested Ficci to move to the Centre for banning bauxite exports. VAL has already sent a three months advance closure notice to the state government stating that it won’t be able its plant beyond December 5 unless it has assured supply of bauxite.

According to Ficci, the aluminum industries source bauxite from captive mines or from the state mineral corporations and the bauxite from these mines have depleted considerably. “The closure of the bauxite mines in eastern Odisha and southern Andhra Pradesh, which accounts for 2.5 billion reserves, has aggravated the situation”, Hazra pointed out.

In the letter, the trade body mentioned that the Indian alumina industry is in doldrums forcing many to scale down operations and even closure owing to difficulty in getting new mining leases for local protests over land acquisitions and difficulties in obtaining forest and environmental clearances.

The surge in exports of bauxite, as per Ficci, not only contravenes the policy of value addition but also forcing an established alumina refinery towards closure for want of raw materials when there shouldn’t be any scarcity of its availability.

If the current situation prevails, the Indian alumina industry, set up with huge investments, will be forced to shut down, while the country will be undertaking import of alumina at much higher cost to the economy, Hazra added.

It may be noted that, India accounts for 7.5% of the world’s bauxite reserve and is placed fifth after Australia, Guinea, Brazil and Jamaica.