The Ministry of Mines is likely to push for a hike in the customs duty on primary aluminium products to provide relief to an industry hit by low prices and under utilised manufacturing capacity.

“We have asked the industry to make a representation to push for their case before we take up the matter with the departments concerned. The aluminium manufacturers are expected to meet me within a week,” said Balvinder Kumar, Secretary, Ministry of Mines, on the sidelines of the National Conclave on Mines & Minerals in Raipur.

In the Union Budget 2016-17, the government had raised customs duty on primary aluminium products to 7.5 per cent from 5 per cent.

However, the capacity utilisation in the industry remains low at around 50 per cent.

Prices on London Metal Exchange, the global benchmark for aluminium prices, have remained low and volatile. On Tuesday, LME price of aluminium was $1,652 per tonne, which is lower than the year-ago price of $1,700 per tonne .

The stress of the aluminium manufacturers is reflected on their balance sheets. Hindalco’s earning before interest and tax from its aluminium business dropped 34.7 per cent to ₹880.48 crore in 2015-16. Vedanta Ltd’s aluminium business had a negative earning before interest and tax of ₹113.72 crore as compared to positive earnings before interest and tax of ₹1,867.28 crore.

Despite its problems, the industry was unable to get the government to levy a safeguard duty.

Kumar also added that unlike the steel sector which got a relief in the form of the minimum import price, similar measures are not on the anvil for the aluminium sector.

“We are not considering any minimum import price or any other kind of duty relief as of now for the aluminium sector,” Kumar added.

(The reporter was in Raipur at the invitation of the Ministry of Mines)

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