India's bauxite production to grow 30% in 2010

Some analysts believe that with rapid GDP growth at 9%, India's metals industry will develop quickly in the next decade. This process will be strongly stimulated and pushed forward by Indian industries of manufacture, building and Infrastructural construction. And early in 2007, India had implemented a new mining policy to encourage foreign capital to invest in exploiting mineral resources. In order to meet the market demand from home and abroad, India's bauxite output is expected to increase 30 percent in 2010, reaching 16 million tons. Both state-owned enterprises and some private firms are planning to expand their scope extensively to improve the production capacity of bauxite. Total reserves of India's industrial bauxite are 23 million tons, with currently extract about 12.3 million tons a year. As the largest aluminum and bauxite demander, bauxite output in China is expected to grow 7 to 13 percent by 2010.During the past decade, less investment was put into alumina all over the world, which had resulted in a great shortage of alumina in 2004 and 2005, therefore, the world aluminium enterprises are actively launching new projects in this field and the world alumina is expected to increase by 42.5 million Tons every year. Although the bauxite production capacity has increased significantly combining with adding another 44 million tones, it is still in a shortage to meet the needs of realizing increase of the alumina capacity. Global market is the main driver for India’s bauxite increase, together with the growing domestic demand, increasing consumption of alumina and enlarged application range, etc. India’s bauxite accounts for 10 percent of the world's, its bauxite not only meets the domestic aluminium sectors’ demand, but also is exported of 2.3 million tons annually. To meet the industrial demand, Indian domestic bauxite and aluminum enterprises are actively performing expansion. Hindalco Aluminum Company, flagship company of Aditya Birla Group, Nalco and Balco Aluminum Company, flagship of Vedanta Resources company are also implementing the expansion plan, with projects in Orissa and Chhattisgarh. Nalco has invested $1.109 billion in bauxite in Koraput, Orissa state, making the its capacity increase to 6.3 million tons per year from 4.80 million tons per year. The company plans to financing $250milion by using external commercial loan for the entire expansion project which will be scheduled at the end of next year. Aditya Birla Group's flagship company Hindalco together with Alcan established a joint venture named Utkal International Alumina Limited Company to invest in bauxite. This joint venture invests $968 million to establish bauxite and alumina plants. Construction of the project bogs down due to local residents’ resistance and the Government’s delaying intervene in the matter. Thus Alcan decided to withdraw from the projects, but the project is in need for Alcan’s technical support. London-based Vedanta Resources company is also increasing its bauxite production at a large scale now. Its subsidiaries Balco and Malco are exploring bauxite in several places, and the associated aluminum plant is under operation. Recently Vedanta also plans to mine bauxite in Orissa, an important part in this new project. Some small-scale manufacturers are unwilling to lag behind, they plan carefully to increase production of bauxite to meet the needs from local aluminum plants. If Governments of Jharkhand, Orissa and Chhattisgarh can review mine lease as soon as possible, India's bauxite production will be doubled in 2010, reaching 23 million tons a year. However, unfortunately, procedural delay is always the main factor that often leads to decrease of production quota. According to the Federation of Indian Mining Industries, many companies’ applications will not get approval before the three Governments failed to slow down the whole process. They all hope the matter can be resolved as soon as possible, in case that will seriously hamper the investment and operating of the mines. Development of these mines also can meet India's raw material demands for increasing aluminium production. COPYRIGHT All rights reserved. The copying, republication or redistribution of WAM News Content, including by framing or similar means, is expressly prohibited without the prior written consent of WAM.