Overview of , , and

1. A perspective of Aluminium

1.1 India has large resources of High Grade deposits of the order of 3037 Million Tonnes (MT) (proved + probable + possible). The recoverable reserves are placed at 2525 MT. The proved and probable reserves are 1218 MT, placing the country 5th in rank in the world, next only to Australia, Guinea, Brazil and Jamaica. Even at an anticipated consumption of 7 million tonne per year (tpa) of Bauxite, these reserves are expected to last for over 350 years. Given the natural resource endowment, growing demand for Aluminium and its alloys, economic opportunities and scope for exports, India can produce Alumina at internationally competitive . Aluminium can also be produced competitively with the latest coupled with cheaper energy arrangements in India, or by toll Alumina in low power cost Aluminium smelters abroad. The greatest scope for value addition and employment lies in the development of down-stream Aluminium end-products like , rolled products, fabrication and finished items. India can benefit by this value addition given the low energy requirements and labour intensity of down-stream industries. Aluminium has significant industrial and economic importance for India, as this is the one metal for which the country has abundant raw material. While our Bauxite reserves account for 7.5% of the world's total deposits, our Aluminium capacity is only 3% indicating the scope and need for new capacities to meet growing internal demand and for sizable exports on a long term basis. Demand for Aluminium is expected to grow rapidly with increasing use in the construction, power transmission, transport and packaging sectors. It may be noted that due to the poor natural resource endowment of other non-ferrous like Copper, Lead, Zinc, , etc., where the country is heavily dependent on imports, Aluminium and value added exports could help in the overall export-import balance of non-ferrous metals.

2 Bauxite

2.1 Alumina is produced from Bauxite . About 1 tonne of Alumina is produced from 3 tonnes of Bauxite and about 1 tonne Aluminium is produced from 2 tonne of Alumina.

2.2 About 89% of the recoverable reserves of Bauxite is of metallurgical grade. Orissa, Andhra Pradesh, Madhya Pradesh, Gujarat, Maharashtra and Bihar are the principal States where Bauxite deposits are located in India. Major Bauxite reserves are concentrated in the East Coast Bauxite deposits of Orissa and Andhra Pradesh.

3 Alumina

3.1 Aluminium metal is extracted from Alumina in a smelter plant. For making one tonne of Aluminium, roughly 2 tonnes of Alumina is required. However, the power consumption for production of one tonne of Aluminium is as high as 17500 KW per tonne of metal in India, which is high by international standards. 3.2 The annual installed capacity for production of Alumina in the country is as under :

(Unit in tonnes)

Company Quantity Location

NALCO 800,000 Damanjodi (Orissa)

BALCO 200,000 Korba (Madhya Pradesh)

INDAL 312,000 Muri (Bihar: 72,000)

Belgaum (Karnataka: 240,000)

HINDALCO 350,000 Renukoot (Uttar Pradesh)

MALCO 50,000 Chennai (Tamil Nadu)

3.3 Government has approved the expansion of the capacity of the Bauxite Mines of NALCO from 2.4 million tpa, to 4.8 million tpa and that of the Alumina from 0.8 million tpa to 1.575 million tpa. Currently, the project is under implementation by NALCO and is progressing on schedule.

4 Aluminium

4.1 Aluminium is produced from Alumina through a smelting process. It has a variety of applications such as in power transmission and distribution, manufacture of aircraft, spacecraft, kitchenware, architectural fittings, grain silos, industrial , automobiles, etc., and also in the defence sector.

4.2 There are seven smelters with a total installed capacity of 714,000 tpa. Two plants with a total capacity of 330,000 tpa, belonging to NALCO and BALCO, are in the public sector, five are in the private sector.

5. Installed Capacity of Aluminium

5.1 Aluminium production in India commenced in 1943 with a modest 25,000 tonnes per annum capacity, which grew to an installed capacity of 714,000 tpa. The five primary producers of Aluminium metal in the country are given below: Public Sector Installed Capacity

NALCO 230,000 tpa*

BALCO 100,000 tpa

Private Sector

HINDALCO 242,000 tpa

INDAL 117,000 tpa

MALCO 25,000 tpa

Total : 714,000 tpa

* The Government has approved expansion of the capacity of NALCO's Aluminium Smelter from 230000 tpa to 345000 tpa and that of the Captive Power Plant from the 720 MW to 840 MW. Currently, the project is under implementation by NALCO and is progressing on schedule.

6 Production of Aluminium

6.1 Production of Aluminium by the primary producers in the country during the last two years is given below:

(In tonnes)

Name 1997-98 1998-99 1999-2000 up to Dec.-1999

NALCO 200162 146206 155053

BALCO 88198 91839 70539

HINDALCO 200304 240926 186577

INDAL 38823 42193 32404

MALCO 25853 24536 10679

TOTAL 553340 545700 455252

7. Exports of Aluminium

7.1 The quantity of Aluminium and its secondary products exported by the primary producers during the last two years is indicated below: (In tonnes)

Name 1997-98 1998-99 1999-2000 up to Dec. 1999

NALCO 55475 39868 64462

BALCO Nil Nil Nil

HINDALCO 26207 25736 33232

INDAL Nil Nil Nil

8 Demand and Consumption of Aluminium by the Domestic

8.1 India was dependent upon imports of Aluminium metal till 1988. With the commissioning of NALCO's plant in 1988 a change took place and the country which was a net importer of Aluminium became self-sufficient. Consequently, the Aluminium Control Order which regulated supplies and prices of indigenous Aluminium was withdrawn on 1 March, 1989. The table below indicates the production, exports and imports of the metal from 1997-98 to 1998-99:

(In tonnes)

Year Production Exports Imports

1997-98 553340 131614 110695

1998-99 545700 809189* 171478(Prov.)

(Export and import figures are based on the information given by DGCIS, Calcutta). *Provisional figures of Export Up to February '99.

9 Steps taken by Government to Improve availability of Aluminium

9.1 To facilitate better availability of the metal in the country, the Government of India has permitted free import of Aluminium under OGL. The excise duty on the metal and its products ranging from 29% to 40% was reduced to uniform rate of 25% during 1993 Budget. This duty was further reduced to 20% during 1994 Budget and to 15% in 1995 Budget. Also, MODVAT has been extended to the Aluminium industry including petroleum based raw material like CPC and Coal Tar Pitch used in the manufacture of Aluminium.

10. Zinc

10.1 Zinc is ranked fourth among metals in terms of consumption after , aluminium and copper. About 7.8 million tonnes of zinc is consumed worldwide every year. While North and America, Australia, erstwhile States (CIS), East European countries, China, North Korea are the major contributors in zinc mine production, Europe, North America, China and other countries in Asia are the major metal producers. In case of zinc metal production, Asia has achieved the highest annual compound growth rate of around 29% (from 0.187 to 1.185 million tonnes) during 1960-1994 . Asia's share in world zinc production has almost trebled from the 1960 share of 5.9% to 16.7% in 1994. Zinc consumption is maximum in galvanising and batteries sectors.

11. Lead

11.1 Among the non-ferrous metals, the consumption of lead ranks fourth after aluminium, copper and zinc. About 6 million tonnes of lead is consumed worldwide every year. Batteries are important end use sector for lead and this sector's share in the world lead consumption has gone up significantly from 49.4% in 1980 to 68.4% in 1994. In fact, the substantial increase in this sector has compensated loss of consumption in the other sectors like Cable Sheathing (due to substitution), and in additives, chemicals, etc. (due to environmental and health regulations). Asia has increased its share in the world production of lead metal from 5.1% in 1960 to 12.7% in 1994. West Europe and Asia are the net importers of lead concentrate while the American continent, Australia, East Europe, China and North Korea are quite delicately balanced at present.

12 Lead and Zinc scenario in India

12.1 The identified zinc and lead resources in the country are estimated at 383 million tonnes. Out of this, 167 million tonnes containing 2.17% lead and 8.16% zinc fall under category of mineable reserves. The bulk of the lead-zinc deposits occur in Rajasthan and are under lease/exploitation of Hindustan Zinc Limited (HZL). A major multi-metal world-class deposit of zinc, lead and associated metals is in Rampura- Agucha belt in Bhilwara District of Rajasthan, which has estimated ore reserves of 60.35 million tonnes containing 13.48% zinc and 1.93% lead.

12.2 The present smelting capacity for zinc and lead metals in the country are 1,82,000 MT and 67,000 MT per annum respectively. The break-up of these capacities is indicated as follows:

(Unit MT per annum)

Zinc Lead

Hindustan Zinc Limited (HZL) 152000 43000

Binani Industries Limited (BIL) 30000 -

Indian Lead Limited (ILL) - 24000

Total 182000 67000 12.3 While HZL is a Public Sector Undertaking, BIL and ILL are in the private sector. BIL produces zinc from imported concentrates at their Alwaye (Kerala) Plant. ILL have two units at Calcutta and Thane (Maharashtra) having 12000 MT per annum capacity each. Both units are based on imported concentrates/scraps. Besides these units, both zinc and lead are also produced through secondary routes from scrap, , residue, etc. Most of the secondary producing units, especially in lead, are in the unorganised sector.

12.4 The demand for zinc and lead has grown at an annual rate of approximately 4% and 5% respectively, during the 8th Plan. With the projected high growth of Industry (and demand for galvanization with zinc) and automobile industry (with automotive batteries with lead as major input), the demand for lead and zinc in India is expected to grow rapidly during the 9th year Plan period. The per capita annual consumption in India is 200 grams for zinc and 100 grams for lead. This is amongst the lowest in the developing world. It is expected that the annual per capita consumption in India will go up to 281 grams of zinc and 170 grams of lead by the turn of this century. As per the Working Report for the 9th Plan, zinc demand is expected to grow at the rate of 4.5 to 6.0% and for lead at the rate of 5 to 7% during the 9th Plan period. The table below indicates the estimated demand and primary production for zinc and lead during the last two years and projection for 2001-2002:

(In Metric Tonnes)

Year Zinc Lead

Demand Produc Gap Demand Produc- Gap tion - tion

97-98 224000 165000 59000 87400 44604 42796

98-99 240100 164000 76100 98100 46900 51200

99-00 254500 161100 93400 105000 78500 26500

00-01 278000* 161100# 116900 120200* 80100# 40100

(* Demand estimated at 6% growth for zinc and 7% growth for lead. # Supplies estimated at 90% capacity utilization of existing capacities.)

12.5 To bridge the gap between demand and supply of lead and zinc metals steps have been initiated to increase the production as as the resource of these metals in the country. The steps taken in this regard could be summarised as follows:

12.5.1 The import of lead and zinc metals is under OGL.

12.5.2 The ban on import of zinc dust has been lifted.

12.5.3 HZL is expanding the existing installed capacities of Vizag and Debari Smelters by 10,000 TPA each.

12.5.4 HZL proposes to set up a new zinc smelter of 1,00,000 TPA at Kapasan in Chittorgarh district, Rajasthan.

12.5.5 HZL has signed an MOU with BHPM for exploration and preparation of feasibility study for deposits of lead and zinc.

12.5.6 HZL has independently taken up detailed exploration and preparation of feasibility study of lead zinc deposit in Kayar (Rajasthan).

12.5.7 Fourteen Licencies for Prospecting involving Foreign Direct Investment (FDI) have been granted for exploration of including lead and zinc during 1999-2000 so far.

13 Copper Survey

13.1 The of copper in International market was steadily declining till 1998-99. However, it bottomed out in June '99 at US $ 1422/ton and started looking up from July '99 onward. The year-wise LME price per ton of copper is tabulated below:

Year LME price of copper

(US $ per ton)

1997-98 2097

1998-99 1581

1999-2000 1682


13.2 The known copper resources in India are characterised by low volume, narrow width, low grade and poor content. With the exception of Malanjkand deposit in Madhya Pradesh, no deposit is amenable to low cost surface and is also not amenable to high degree of mechanisation.

13.3 The thrust is, therefore, on exploration for identification of world class deposit for economic exploitation. The National Policy announced by the Ministry of Mines in March '93 has thrown open the for mineral exploration and exploitation in copper mining. 13.4 Due to high cost of operation of HCL's underground mines, HCL has already closed its old deepest mine at Mosaboni, Bihar. The Government has granted permission to close down Pathargora and Kendadih mines in Bihar. This may result in lowering the cost of production from HCL's mines.

13.5 Copper smelting capacities are expected to maintain their increasing trend like other countries in the world and by the year 2000-2001, the total indigenous smelting capacity is expected to increase from the present 2.47 lakh tpa to 3.11 lakh tpa. The existing and proposed smelting capacities in 2000-2001 are tabulated as under:

(In tpa)

Name of Existing Proposed Organisations capacity

Hindustan Copper 47,500 61,500 Ltd.

Sterlite Industries 100,000 100,000 (India) Ltd.

Birla Copper 100,000 150,000

Total 247,500 311,500

13.5 It may be mentioned here that M/s. Swil Ltd is yet to establish theirproduction capacity of 50,000 tpa through scrap route.

13.7 As per the report of Non-ferrous Working Group for IXth 5 year plan the consumption of refined copper is also expected to increase to 4.22 lakh tpa by the year 2000-2001.