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Billionaire Anil Agarwal-owned Vedanta which has been advocating a hike in customs duty on aluminium scrap, has imported 12.69 lakh tonnes (lt) of alumina (between April and August), a raw material for making the metal.
If that happens, it could hit SME players. Over 3,000 small and medium enterprises have imported 5.41 lt of aluminium scrap.
The company along with two other primary aluminium producers Hindalco Industries and Nalco have moved the government to hike import duty on aluminium scrap to 10 per cent from 2.5 per cent.
Agarwal recently went on record demanding the hike maintaining India was becoming a dumping ground amid the ongoing tariff war between the US and China.
Kishore Rajpurohit, Director, Metal Recyling Association of India told BusinessLine that while Vedanta has been campaigning to scrap imports to tackle the current account deficit (CAD) and protect its margins, it was dependent on imports to keep its factory running.
Even though Vedanta may claim it is not contributing to CAD as it exports a major portion of its aluminium output, he said it is actually exporting electricity as power accounts for 35 per cent of conversion cost from alumina to aluminium.
“When the Government is struggling to supply uninterrupted electricity to every village, we have a company exporting that precious resource by trampling SMEs,” he added.
Vedanta did not respond to a detailed questionnaire from BusinessLine .
Globally, countries promote metal recycling as it is most efficient while India is moving the other way, said Rajpurohit.
Denying virgin aluminium manufacturers’ claim that substandard scrap is being imported, Sanjay Mehta, President, MRAI, said the shipments adhere to global standards set by the Institute of Scrap Recycling Industries.
The recyclers are not in competition with primary producers as the aluminium alloy ingots and aluminium deox from scrap are used by automobile and steel companies. The average primary aluminium prices on LME was about $2,100 a tonne last month, while aluminium alloy was sold at $1,400, he pointed out.
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