New Delhi, Feb 26 (PTI) India's import of bauxite has jumped to meet rising domestic demand as its mines in the country have not been successfully auctioned, and it has caused a loss of USD 400 million to the exchequer in the past five years, Nalco former CMD Tapan Kumar Chand on Friday said.
Bauxite is the main ore of aluminium.
In the past five years, since the inception of the MMDR Act 2015, no metallurgical grade bauxite mine has been successfully auctioned, he said. This is largely linked to the unviable and arbitrary determination of average sale price (ASP) of metallurgical grade of bauxite linked with the selling price of the end product aluminium, Chand added.
This current pricing structure is responsible for the most part, for various state governments not being able to auction the bauxite mine leases. The current pricing structure links the selling price of the end-product (aluminium) to determine the ASP of metallurgical grade bauxite, and ends up including costs such as transportation, quality control and rehandling cost, which should not be done.
This will render aluminium production unviable in the country, he said stressing that a repercussion of this is being seen in the pause of an additional investment of over Rs 50,000 crore in the aluminium sector.
Bringing enough bauxite blocks of the estimated deposits of 3.8 billion tonnes in India into auction and increasing the capacity of existing mines by at least 50 per cent will be key to moving India towards becoming Aatmanirbhar Bharat or self-reliant India, he said.
'This will also improve the global competitiveness of the Indian aluminium industry,' he added.
Another important change that is required is in the methodology of the calculation of the average sale price (ASP) of bauxite which if continued in its current form, will have a negative impact on the overall growth of the domestic aluminium industry, he said.
'The price determined from the current ASP system is artificially increased up to 300 to 400 per cent by including expenditures incurred beyond the mining lease,' Chand said.
Bauxite mining creates livelihood opportunities in remote regions that otherwise have limited potential for other economic activities. A single developed mine potentially generates over 10,000 jobs and brings in over Rs 5,000 crore worth of state revenue.
Modern, sustainable mining methods trigger socioeconomic development bringing remote regions into the economic mainstream. Hence, utilising India's natural bauxite dividend needs to be a policy priority. PTI SID HRS hrs