1) Aluminum production is expected to grow globally at around 6.7% annually through 2020, driven primarily by growth in India, China, the Middle East, Brazil, Africa, and the United States. 2) China is currently the world's largest producer of aluminum, despite having relatively limited bauxite resources, due to large increases in aluminum capacity over the past decade. 3) India has significant bauxite and coal resources to support aluminum production but its capacity remains low, around 2 million tons annually, compared to China's 30 million tons, representing a missed opportunity for leadership.

1. Facts, Prospects and Potential of
Aluminium Industry in India

2. • World aluminium production is at around 55 million tons,
expected to grow at around 6.7% CAGR up to 2020, mainly
due to the expected growth in India ~ 11%, China ~ 10%,
Middle East ~ 8%, Brazil ~ 7%, Africa ~ 5% and return of
growth in US (~ 4%).
• World alumina production is around 110 million tons and the
bauxite mined is around 350 million tons
• Presently China with aluminium metal production of 30
million tons per annum, is the leader, despite less resource of
good grade bauxite in the country. China’s CAGR during the
period 2000 – 2010 was 18%, when its GDP increase was from
5% to almost 14%.

3. Aluminium Industry in India and China were very similar in
capacities till the 1980’s. During the last one decade China
has increased their capacity nearly 20 times but the capacity
in India remains at a meagre level of about 2 million tonnes of
aluminium metal (about 1.5% of world production against
48% or more produced by China).
China imports bauxite on an average at US $ 50 – 55 per ton
CIF (includes bauxite price + transportation to port + handling
charges at port + shipping charges to China port) from
various parts of the world, produces aluminium and adds
value by manufacturing all capital goods and components
required for computers to cars, buses, aeroplanes etc. After
self-consumption China exports the finished metal to various
countries of the world, thus adding 35 – 50 times value to the
bauxite cost.

4. The indecisiveness and policy issues on part of the
concerned authorities had made India practically hand
over the possible leadership position to China, in-spite of all
required resources like bauxite, coal, manpower, money,
market etc available abundantly in this country.
World average per capita consumption of aluminium is ~
8kg , with 22-25 kg in developed nations, while Indian per
capita consumption is just 2.2 kg – one of the lowest in the
world. With the country’s GDP level expected to grow at a
rate of 7 to 8% in the next 5 years, even if India can aim to
target and reach the present average consumption by
2020, the industry should grow by 2 to 3 times the current
level.

5. India has reported a trade deficit of US $ 45 billion for the quarter
April – July, 2015. Investments in the Aluminium Industry in
India can prove important for the development of the Indian
economy in terms of foreign exchange earnings as only mineral
based industry next to agriculture can employ the rural masses in
a prominent way and at the same time help bridge the gap of
foreign exchange earnings as the required major resource like
bauxite, coal etc. are abundantly available in the country.

6. India in general and the eastern states of Andhra Pradesh &
Odisha in particular, hold vast potential for development of
alumina and aluminium industry because of the availability of
rich bauxite deposits (> 75%) & coal ( > 33%), the main inputs
for aluminium industry. This will bring good development in the
most under developed region of the country by turning
mineral and metal potential of the eastern states.
Approximately one ton of aluminium metal is being produced
for each square meter of land area used for mining. In order to
bring in development in the Agency / Tribal area and provide
employment opportunity, mining is an important avenue, since
most of the mine workforce (~ 80 – 90%) is recruited locally.
Other than that, aluminium is a green metal as it can be
recycled infinite number of times without any great loss by
consuming only 5% of the energy required for primary
production.

7. Unless the authorities take industry positive steps to give a boost
to industry the country may miss the growth opportunities. It
should be noted that there are several other low cost countries
which are holding reserves of good quality bauxite and also
have low cost energy generating possibilities. This will be
tremendous loss as the industry contributes extensively in terms
of employments, investments & foreign exchange.

8. Considering the potential and our capability, if the governments
(both central & state) can clear all the pending projects and
enhance the installed capacity of the aluminium metal to twice
the existing capacity both for alumina and aluminium, it would be
possible in the next 5 – 7 years or so, to easily achieve the above
mentioned targets. Investment to the tune of INR one lakh crores in
the bauxite / alumina /aluminium sector is required to realize this
target. Most of the capital goods required (up to 80% at least) are
through indigenous sources / industries, which can give further fillip
to the capital goods industries. This would give on an average
employment to about 120 – 150,000 persons for at least 3 years
during the construction phase and thereafter regular jobs for at
least 30,000 people directly and more than 300,000 people in
directly. Most of the employment would go to the locals (wherever
they are) and thus elevate their standard of living. Furthermore,
investment in downstream industries, both semi-finished and
finished goods manufactured indigenously would go a long way in
furthering the “Make in India” campaign.

9. Already, calcined petroleum coke, caustic soda, lime and
aluminium fluoride are being produced indigenously and with
the improvement in the alumina / aluminium capacities, these
industries would further add capacities through Brown / Green
Field Projects, with allied power production units, adding to
further investments to the tune of Rs 15,000 – 20,000 crores.
The environmental standards being practiced in the industry in
India is comparable to the best in the world and with the
possible utilization of ash and red mud from the alumina
refineries and spent pot lining from the smelter being possible, it
might not be long before the new Green field alumina refineries
& aluminium smelters in India would act as model for the world
aluminium industries.

10. By providing value addition from ore to finished products,
instead of exporting bauxite as ore India can become a
powerhouse in aluminium, and reach its slated place in the
world aluminium map, if not next only to China. “Aluminium
industry is a gold mine” for the development of the country .

11. What is required to achieve this growth?
Providing conducive atmosphere and faster approvals for the
projects launched and to be launched, taking care of all norms &
stake holders’ interests will facilitate growth for the industry. There has
been a lot of misplaced commotion by some of the
environmentalists on ecological aspects but with the knowledge
available in our country, we can prove to the world that a
completely sustainable development of the aluminium industry can
be achieved. In the context of aluminium industry, sustainable
development involves the minimization of the use of raw material in
both alumina and aluminium production, energy conservation at
every step starting from bauxite mining to the finished product,
ensuring that the waste generated is disposed of in an
environmentally friendly way or better still converted into useful
products, carrying out efficient recycling of all waste / scrap,
enlarging the applications and ensuring adequate safety for
personnel.

12. At the end, to make the concept of “Make in India” a real
success and realize the dream, competitiveness would be a key
measure. This can be achieved only when we can provide the
complete value chain of products and make ourselves
competitive by developing manufacturing hubs for production
of value added components / products in Aluminium like China,
which would then, not only reduce import dependence but also
offer export competitively to other markets in the World.
(Mr. H Mahadevan, the Vice President for IBAAS (International Bauxite,
Alumina & Aluminium Society (IBAAS)) has about 38 years experience in
the various areas of the Aluminium Industry with a number of key
organizations like Anrak Aluminium, Balco, L & T, Aluminium Pechiney &
BHP Billiton. The 4th International IBAAS Symposium would be held in
Suzhou, China during November 25-27, 2015 with the theme “The
Development and Future of Aluminium Industry in China - Reality and
Dream”.)