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Optimal Mining Of Domestic Bauxite Resources To Be A Global Aluminium Hub

Indian Aluminium producers have put in place sustainability measures to restore the land that has been mined to a natural and economically usable state for rehabilitation and livelihood.

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Aluminium as a metal is of strategic importance and plays a critical raw material in defence, transportation, electricity, aerospace, automobile, consumer durables, freight corridors, bullet trains, energy efficient electric automobiles, Rail wagons and many more.

It is an essential commodity for various other industries / SMEs due to its critical role in diversified applications. With huge Investments of over Rs. 1.5 Lakh Crores the sector creates over 20 lakh direct and indirect jobs and has developed over 4000 SME’s in the downstream sector.

Mother nature has blessed our nation with the 5th largest coal and bauxite reserves, both of which are important raw materials for Aluminium production. It is a travesty that even with such mineral geology and excess domestic production capacity, 60% of the nation’s Aluminium requirement is met by imports, denting the national exchequer by almost Rs. 40,000 Crs per year (~ USD 5.5 Billion) and hurting the Hon’ble Prime Minister Vision of Atmanirbhar Bharat.

Even with Bauxite reserves of ~ 3.8 Billion Tons, Indian Aluminium Industry have to meet their bauxite requirement from imports rendering them economically unviable and globally uncompetitive. Further, due to imports, the industries operate at reduced capacities adversely impacting local job market. Import of bauxite, one of India’s most abundant ores, has caused an estimated forex spending of over 400 Million dollars in the last 5 years alone.

It is a matter of great concern that no Metallurgical Grade Bauxite Mines has been successfully auctioned in the last 5 years since inception of MMDR Act 2015. It has happened majorly due to arbitrary determination of Average Sale Price (ASP) of Metallurgical Grade of Bauxite linked with the selling price of the end product Aluminium.

Due to this abnormality, various state governments are unable to auction the bauxite mineral blocks as the present system of Bauxite ASP Calculation shall make the production of Aluminium unviable in the country. Planned new Investment of over Rs. 50,000 Crores in Aluminium Sector has been put on hold as it shall be futile in the current Bauxite ASP regime.

Bauxite Mining creates livelihood opportunities in the hinterland which otherwise have limited potential for other economic activities. Given the present employment crisis in the country, the sector could be the key to utilizing India’s phenomenal demographic dividend. It can also bring transformational change in various aspirational districts of the country by connecting them to the mainstream and enable substantial local job creation for the migrants returning to their home states post Covid Pandemic. Opening of a single Bauxite Mine has the potential to generate thousands of Livelihood opportunities and can garner over Rs. 5,000 Crs. to the State revenue over the life of mine.

On environment front also surface-mining operations for bauxite is among the most eco-friendly and sustainable, involving extraction of bauxite ore from the surface and upper layer of the mine, without digging deep trenches for extracting the ore.

There are enough examples in Odisha and Chhattisgarh alone where mining operations are conducted efficiently without affecting the eco-system or the communities, yielding rich economic and social dividends for all stakeholders – the state, the organizations, the local communities, and the nation.

Indian Aluminium producers have put in place sustainability measures to restore the land that has been mined to a natural and economically usable state for rehabilitation and livelihood. Land with rich bauxite reserves is mostly barren and uncultivable. After the mined-out area is reclaimed by backfilling of the top layer soil, the surface is brought back to the original ground level. Today, the mining commitment includes extensive re-greening of the mined land and proactive participation in the socio-economic development of communities around. There are significant opportunities to implement technology driven scientific mining techniques in bauxite mining

in India as most of India’s bauxite reserves are located on a single plateau making bulk open cast mining possible.

India is the 3rd largest producer and consumer of Aluminium globally. India’s per capita Aluminium Consumption is merely 2.8 kg compared to World Average of 12 KG and for China it stands at 26 Kg. India’s Aluminium demand is to expand from current 4 MTPA to 12 MTPA by 2030, which shall need fresh Investment of 4 Lakh Crs. and have potential to create 10,000 SME’s & corresponding jobs. This shall need a multi fold growth in bauxite production from current 20-22 Million Ton to over 72 Million Tons per year to meet the domestic requirement

It’s high time we resolve the Bauxite ASP issue aligning it, in line with other bulk minerals, auction the available Bauxite Mines and fully utilize the potential of the domestic Aluminium Industry to become self-reliant, save precious Foreign exchange, create local employment and yield rich socio-economic dividends.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

Tags assigned to this article:
raw material Domestic Bauxite Global Aluminium investment

Ansuman Das

The author is former NALCO Chairman and Chairman & Member, Public Enterprises Selection Board , Govt of India, New Delhi

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