If Anyone Can End India’s Bauxite Mining Nadir, It’s Naidu

~by Sohrab Darabshaw

DECEMBER 3, 2014: It’s, of course, no secret that India’s Eastern Ghats have some of the world’s finest bauxite reserves, a crucial raw material in the making of aluminum.

Experts have been of the opinion that once mining was allowed in full swing, the Indian aluminum industry could attract multibillion dollar investments, opening up not only employment opportunities for thousands but contributing about $25 billion to the Indian exchequer in about 15 years.

Vedanta Resources‘ CEO Tom Albanese was of the view that negative propaganda about bauxite mining was an offshoot of a “vilification campaign,” saying there was a need to counter it by creating awareness of availability of proven environment-friendly practices.

At a recent international seminar organized by the International Bauxite, Alumina and Aluminium Society (IBAAS) in India, Albanese was joined in his pitch by the president of Anrak Aluminium Ltd., Hariharan Mahadevan, who felt there was “misplaced commotion” over red mud and “so-called” ecological issues that had become obstacles in the way of the aluminum projects in the Eastern Ghats region of India. Long-term planning to ensure sustainable safeguards and precautions was the way to go, he added.

Anrak Aluminium is a joint venture between Ras Al Khaimah Investment Authority (of the UAE) and Penna Cements, and had constructed a 1.5 metric ton alumina refinery through an agreement with the Andhra Pradesh Mineral Development Corporation (APMDC) that it would supply bauxite from its 225-metric ton Jerrala deposit. But APMDC was unable to keep its commitment, as the Indian government later froze all earlier clearances for bauxite mining development. With a new government in place, the company has expressed hope of securing permissions to mine bauxite in the next few months.

In approximately one year’s time, the Indian aluminum sector’s capacity will touch 4.36 metric tons. But much of it will hold no meaning because of the lack of raw material security. The opening of new mines has been stalled for various reasons – protests by local citizens and non-governmental organizations, even violence by a break-away faction of the Maoist communists.

Vedanta’s alumina refinery in Odisha at Lanjigarh has been caught up in this, and the company had to procure 3 metric tons of bauxite from different parts of the country, as well as from Guinea, to meet its needs.

But after the third time, Chief Minister of Andhra Pradesh Chandrababu Naidu has now indicated that he would take up the challenge of opening bauxite mines in his Province, despite stiff opposition. For his previous work as CM, Naidu was applauded by world leaders, including Bill Clinton and Tony Blair.

A report in The Business Standard said if anybody could get bauxite mining going, it was Naidu. Of India’s bauxite resources of 3.48 billion tons, Andhra Pradesh accounts for 18%. No wonder aluminum majors now have their hopes pinned on Naidu.

The author, Sohrab Darabshaw, contributes an Indian perspective on industrial metals markets to MetalMiner.

Courtesy: Metal Miner