India’s aluminium industry which is already been hit by the COVID-19 pandemic is likely to get some relief. The ministry of finance’s decision to jointly auction 500 mining blocks for captive mining, including exploration of bauxite and coal and could increase the cost competitiveness for primary aluminium producers in the country.
Davis Index had earlier reported about aluminium taking the worse hit with prices on LME hitting 2016 lows of $1,455/mt levels. The sharp slide had led to smelters incurring losses.
Captive mining of coal as announced by the ministry of finance could reduce the costs incurred for electricity generation, aiding primary producers. The ministry also looks to do away with the distinction between captive and non-captive and allow mining lease transfers and sale of surplus unused minerals.
The Federation of Indian Mineral Industries (FIMI) had requested the government on May 14 for export duty waiver of 30pc on iron ore and 15pc on non-metallurgical bauxite. The mining body had also urged the Indian government to declare a waiver on statutory mineral payments towards royalty, District Mineral Foundation, and National Mineral Exploration Trust (NMET) till March 31, 2021.
The stimulus package announced by the Minister of finance, Nirmala Sitharaman, however, had no mention of such a waiver. The package though looks to rationalize the stamp duty paid at the time of granting of mining leases. These measures will be financed through the Indian government’s $265bn stimulus package as announced by the Prime Minister Narendra Modi.