India has a known reserve of around 300 Million tonnes of Bauxite (12 % of World Reserve ) of which nearly 250 Million tonnes of Bauxite are available in the eastern coast of Odisha and Andhra Pradesh. The balance quantity is available in Jharkhand, Madhya Pradesh, Chattisgarh, Maharashtra, Goa, Gujarat, etc. While Gujarat Bauxite is very rich in Alumina ( > 50 % ), its quantity is limited. It is mostly used for Ceramic Industries in India and abroad. Some attempts are being made to set up an Aluminium Smelter in Gujarat but its life will be very short.
Currently, India mines nearly 10 Million tonnes of Bauxite (~ 3.3 % of known Reserve ), imports another nearly 1 Million tones of Bauxite and Exports also nearly 1 Million tonnes of Bauxite. Current Aluminium Production in the country is around 2.5 Million tonnes. Annual Export of Aluminium is nearly 1.0 Million tonnes. Per capita consumption of Aluminium in India is around 1.3 Kg.
Per capita consumption in India is almost the lowest in the World due to lack of interest amongst the Primary Aluminium Producers to invest in larger scale Downstream activities like Sheet Rolling. World class Rolling Mills are of 1 Million tonnes capacity, producing Foil Stock, Litho Stock, Can Stock and Auto Body Stock. Hindalco Industries is the only exception in this regard. Through application engineering alone, India can introduce many more usage of Aluminium products enhancing per capita consumption.
Export duty on Bauxite has been raised from 10 % to 20 % in the Current Budget. Government will raise export duties on bauxite to help local aluminum producers, which are facing a shortage of the mineral because of mining restrictions. This increased Export duty will have hardly any impact on Indian Economy, but would send a signal to the Exporters and also to the Importing Countries on Indian’s long term Aluminium Policy. Some Aluminium Companies in India are being denied of Mining Rights through Environment and Forest Clearances. This has forced them to import Bauxite and value added Alumina to keep their Smelter in operation. By discouraging export of Bauxite, Government of India is sending a strong signal to the Miners to supply Bauxite to the domestic Alumina Refineries rather than export. China, being the main beneficiary of Indian Bauxite Export, is also getting a signal that they should not dump Aluminium (at SME rates) in the international market at lower than LME prices. Stoppage of Bauxite export from Indonesia to China also gave the same signal to China.
Indian Bauxite from Odisha and Andhra Pradesh are predominantly Gibbsitic while Bauxite reserves from other states are Bohemetic in nature. While Gibbsitic Bauxite can be digested in Caustic Soda solution at relatively low temperature and normal pressure, Bohemetic Bauxite needs two stage of Caustic digestion; initially at relatively low temperature to digest Gibbsitic Bauxite and then at relatively higher temperature and higher pressure to digest Bohemetic Bauxite. This double digestion process makes refining of Bohemetic Bauxite more expensive. Besides, one needs Boiler quality steel for fabricating Digesters to withstand high pressure and high temperature with a statutory obligation for regular inspection by Boiler Inspectors, authorized by the Government.
Typical Reserve and Composition of Odisha Bauxite
Reserve : 190 Million Tones
Mining Area : 10 Sq. Km
Av. Bauxite thickness : 11.5 meters
Total Alumina Content : 45 %
Of which Gibbsitic Alumina : 40 %
Total Silica Content : <2 %
Of which Reactive Silica content : 1.4 %
Titania Content : 2.0 %
Ferric Oxide Content : 25 %
High Gibbsitic Bauxite with low reactive Silica from Odisha and Andhra Pradesh, while treated with ALCAN RED Process followed by ALUSWISS WHITE Process, gives LEAST Cost Alumina in the World.
India has an Excellent Bauxite and Alumina situation. However, mining restrictions, rising power cost and high Green House Gas emission from Coal fired Thermal Power Stations are turning out to be major concerns for the domestic Aluminium Smelters.
If India levies 20% export tax on aluminum-rich bauxite it is likely to raise prices for Chinese buyers. In May 2014, India was the second-largest exporter of bauxite by sea to China, after Australia. China has been struggling to get bauxite from India, Australia and Africa since Indonesia had imposed a ban on ore shipments in the beginning of this year. But importing from Africa turns out to be quite expensive due to high freight rates. Bauxite prices are likely to rise due to the export tax in near future and affect China’s built up stocks of the mineral.
On the domestic front, aluminium players like Vedanta and Hindalco are falling short of bauxite for expanding domestic aluminum production. This decision is expected to help domestic aluminium makers with an easy supply of minerals. There could be a fall in the demand for Indian bauxite immediately as a result 20% export duty but it will at least oblige India miners to sell in the domestic market.
R N Parbat is currently a Management Consultant. He is a Former Director & Chief Operating Officer of INDAL, a subsidiary of ALCAN, a Former Managing Director of Indal Hydro Extrusions Ltd., a Former Chairman of HIrakud Power Co. Ltd., a Former Chairman of Utkal Alumina International Ltd., a Former President of The Indian Institute of Metals, Founder President of Millennium Institute of Energy and Environment Management.
The author, as Chairman of Utkal Alumina International Ltd., a Joint Venture Company formed by Indal, Norsk Hydro and Tata Industries strongly advocated investment decision in Quatar for setting up of an Aluminium Smelter utilizing the least cost Alumina from Odisha / Andhra Pradesh. There is still time to explore such opportunities in India’s friendly Oil and Gas rich countries.
He can be reached at firstname.lastname@example.org