Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

The announcement by the Prime Minister of India, Narendra Modi, that India will lockdown for three weeks – from March 25 for 21 days – in a nation-wide drive to contain the spread of the Covid-19 outbreak has been met with a pragmatic reaction by India’s metals majors. 


Rahul Sharma, CEO, alumina business, Vedanta, in his capacity as co-chair of Ficci’s (Federation of Indian Chambers of Commerce and Industry) mining committee, laid out for Davis Index the immediate short-term implications of the lockdown and what the government needs to action to ensure collateral damage to industries is at a minimum.


Speaking about the mining sector, Sharma said that to cater to the needs of the domestic industry and reduce dependence on imports, all mines, with approvals, can be allowed to operate at 25pc enhanced capacity. He urged government to waive payment of royalties for the next six months. 


“However, payments to the district mineral fund (DMF) can continue to strengthen development of mining districts and to take necessary preventive measures,” he said.“Under the lockdown orders, only industries with continuous operations and those supplying essential products can remain open,” Sharma says, adding, “In order to maintain continuity of constant operation, constant communication at the district level for response planning is a must. Any early communication of planned measures and joint planning with the industry will help avoid a shock to supply chains at the local level.”


Sharma reiterated that power plants, ports and railways are the lifeline of the economy and must be allowed to “operate seamlessly”. 

He urged the government to ensure continuity of operations with necessary precautions to ensure the necessary raw material is available for continuous operations of industries. 


In terms of market liquidity, Sharma requested the government announce measures to extend all debts, loans, commercial papers, and NCDs, for at least six months, and for the Reserve Bank of India (RBI) to enable funding for corporates as needed.

He further appealed to the government to reduce the cost of funds: “RBI should reduce rates by 100 BPS and have banks and financial institutions pass the complete benefit of reduced rates to industries”, Sharma said.


Speaking about power-intensive industries, Sharma appealed for a GST compensation cess of Rs400/T on coal to be waived for the next six months. “Also, electricity duty on industries can be waived for the next six months,” Sharma said.


Vedanta is the primary aluminium producer in India with a capacity of 2.3mn mt and a 40pc market share in the domestic aluminium industry. The company’s aluminium smelters are located at Korba (Chhattisgarh) and Jharsuguda (Odisha), and an alumina refinery is at Lanjigarh (Odisha).

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