According to the Indian Industrial Value Chain Council (IIVCC), the group representing the organizations involved in the industrial production and consumption supply chain activities across India stated that the state-owned integrated aluminium company Nalco, whose surfeit quantity of alumina produced remains inaccessible to the domestic aluminium manufacturers, now that manoeuvring them towards considerable dependency on imports and inflating their cost load.
Ashok Kumar Agrawal, the National Convener of IIVCC, Nalco was allotted bauxite mines in gratis to uplift the national aluminium industry. Consequently, the surplus alumina that is not being absorbed by Nalco needs to be supplied to other aluminium producers rather than exporting the raw material.
The domestic alumina demand of India is around 8 million tonnes annually, out of which 7 million tonnes are obtainable locally, while the prevailing is settled through importation.
Presently Nalco’s alumina production stands at 2.75 million tonnes per annum. Consequently, after utilising the alumina produced for its aluminium production, the PSU has surplus availability of alumina for around 1.3 – 1.5 million tonnes per annum.
IIVCC further professed, “However, Nalco’s alumina exports presently account for 60% of its production. It utilises 1 mtpa of alumina generated for captive consumption and the balance 1.3 mtpa is sold via tenders only to overseas buyers.”
“By exporting alumina, Nalco is creating an uneven playing field for its peer aluminium companies”, the group said.
The production and supply chain body also stated that diverse domestic aluminium smelters are functionalizing in established SEZs in the nation and by supplying alumina to these producers, Nalco will obtain the export benefits like duty drawbacks, EPCG benefits and others.
The SEZ-based plants in the domestic market have manifested their interest in participating in Nalco’s tenders and are also ready to pay the port prices for directly securing supplies from it, while this could result in an additional INR200 crore for the PSU.
IIVCC exemplified, “Due to Nalco’s policy to not supply locally to domestic aluminium players, there now exists a situation of simultaneous export and import of alumina within India, which has caused a loss to the exchequer of nearly $5 billion (₹40,000 crore) in just the last seven years.”
This is also to be mentioned that the traffic circle in exporting and re-importing alumina is also clogging the logistics network internally.
source https://www.alcircle.com/news/nalco-s-alumina-export-policy-impacts-domestic-aluminium-producers-iivcc-79274
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