Lower export duties could boost India's bauxite mining and export earnings: FIMI

The all-India apex body to promote the interests of all mining, mineral processing, and metal-making industries, the Federation of Indian Mineral Industries (FIMI), has requested the removal of bauxite export duties, citing optimal utilisation of low-grade mineral resources as the move will speed up the reopening of closed bauxite mines, create jobs, and earn foreign exchange.

In its pre-Budget proposals to the finance ministry, FIMI said, "The export duty of 15 per cent on bauxite is detrimental to Indian non-metallurgical bauxite producers and exporters. Therefore, this Federation requests the complete withdrawal of export duty on bauxite exports."

According to the report, India is self-sufficient in meeting its requirements and has enormous potential to become a major player in the international bauxite market. Domestic alumina and aluminium producers have captive mines or meet their requirements from mines in the country's east and centre that contain plant-grade bauxite.

However, bauxite deposits on the country's west coast are low in alumina content and high in silica, making them technically unsuitable and economically unviable for the country's refiners/smelters. In certain countries, non-plant grade bauxite is accepted because of the need for minerals and the availability of technology for processing it.

“More than 50,000 workers, mainly in Gujarat's Jamnagar/Porbandar region, are effectively employed directly and indirectly by the shipment of subpar non-plant grade bauxite from the country's west coast. Additionally, it creates a thriving economic environment for nearby towns, stevedores, and other supporting businesses”, FIMI added.

Besides generating revenue for the exchequer through royalties, port dues, and taxes, it also contributes to foreign exchange earnings and reduces trade deficits. Low-grade bauxite is abundant in the country, so much so that it is exported primarily from Maharashtra and Gujarat.

However, FIMI stated that the imposition of a 15 per cent export duty on bauxite had a negative impact on the ore's production and export.