Importing bauxite, one of India’s abundant ores has caused an estimated forex loss of over $400 million in last 5 years alone. This has also caused missed opportunities of generating mass scale employment. Bauxite mining creates livelihood opportunities in regions which otherwise have limited potential for other economic activities. Opening of a single Bauxite mine has the potential to generate over 10,000 livelihood opportunities. This can garner over Rs 5,000 crore to the State revenue over the life of the mine.
Aluminium, a metal of strategic importance for India to attain its goal of becoming a $5 trillion economy, continues to be a highly imported metal. This despite India having world’s fifth largest coal and bauxite reserves, both of which are important raw materials for aluminium production. India is also the 3rd largest producer and consumer of aluminium globally. The country’s domestic demand expected to expand from 4 MTPA to 12 MTPA by 2030. For this, a multi fold growth in bauxite production from current levels of 20-22 Million Tonnes to 72 Million Tonnes per year is needed to meet the domestic requirement.
To this essence, tapping country’s 3.8 Billion Tons Bauxite reserves is a key step to gravitating India towards becoming self-reliant.
Aluminium is of strategic importance and is a critical raw material in defence, transportation, electricity and many more sectors. It is an essential commodity for various other industries due to its critical role in diversified applications. With huge investments of over Rs 1.5 lakh crore the sector creates over 20 lakh direct and indirect jobs. This investment has also developed over 4,000 SMEs (Small and Medium Enterprises in the downstream sector. The abnormality of arbitrary determination of Average Sale Price (ASP) of Metallurgical Grade of Bauxite linked with the selling price of end-product.
Aluminium has led to various state governments being unable to auction the bauxite mineral blocks. This perhaps is due to present system of Bauxite ASP Calculation that makes production of aluminium unviable in the country. Additional and planned investment of over Rs 50,000 crore in the aluminium sector is put on halt. Moreover, this has been deemed futile in the current Bauxite Average Sale Price regime.
After the mined-out area is reclaimed by backfilling of the top layer soil. After that, surface is brought back to the original ground level and then becomes cultivable. The mining commitment includes extensive re-greening of the mined land and proactive participation in the socio-economic development of communities around.
It is now the right time to try and resolve the Bauxite Average Sale Price issues by aligning it to bring it in line with other bulk minerals and fully utilize the potential of the domestic Aluminium Industry to become self-reliant, save precious foreign exchange which will lead to creation of wide range of employment opportunities locally while yielding rich socio-economic dividends for all stakeholders.
