Bauxite exporters for long have been persistently demanding the removal of custom duty on export of the ore. Yet in the last budget custom duty on export of Bauxite Ore was marginally reduced from 20% to 15%. This reduction in custom duty is inadequate, bauxite continues to attract heavy custom duty and as a consequence the price of Indian bauxite is uncompetitive in the global market, further resulting in a decline of nearly 11 % of its exports said Mr. Vijay Kalantri, President, All India Association of Industries (AIAI).
Mr. Kalantri commented that the average sale price of bauxite in the international market is in the range of USD 26 to 30 FOB. Whereas Indian bauxite is at USD 32 to 35 FOB due to the 15% export duty levied on the ore. Resulting in an adverse impact that small and medium sized enterprises engaged in mining, processing and exporting of bauxite face in the global market.
Mr. Kalantri is of the view that the authorities should relook into the issue as the bauxite, which is being exported is non-plant grade, low density bauxite i.e. bauxite which cannot be used in refractories and is mined from the west coast.
Also domestic aluminium producers refuse to source material from the west-coast even to tide over their rare and temporary raw material disruptions and so from a domestic point of view, this bauxite is waste-ore added Mr. Kalantri.
Mr. Kalantri further added that small mine owners and exporters have over the last 10 years taken the initiative to mine and export these inferior ores and have succeeded in developing a sustainable bauxite industry which generates direct and indirect employment in the mining sector of more than 50,000 laborers only in Gujarat & Maharashtra.
It is also important to note that being a mining industry this is a labor driven sector and is responsible for hundreds and thousands of labourers employed within the sector either directly or indirectly. If exports are stopped, thousands of laborers will lose their jobs as the present situation threatens to destabilize small units of the sector resulting in loss of employment and job cuts said Mr. Kalantri.
Mr. Kalantri also commented that China is one of the world’s largest consumers of bauxite being resource poor it needs to import bauxite for its huge quantities of aluminium requirements. Also Chinese refineries are programmed to use a variety of bauxite combinations regardless of its quality, energy potency or its consequence on the ecosystem.
China also imports bauxite from Malaysia, Australia and Guinea. Indian Bauxite comprises of only 14% of the Chinese bauxite import requirements as compared to other competing countries mainly on account of the steep export duty and low quality.