----Interview with Chandresh Bhut
Chief Managing Director
India LABH Enterprise
LABH Enterprise is a privately owned company in India and was set up in 2006, focusing on bauxite mining and sales in Gujarat. The company's bauxite business covers metallurgical grade Al2O3 46-48% SiO2 6%max, refractory grade Al2O3 52-56% and cement grade Al2O3 42-43%. They exported a total of 2 million tonnes of bauxite to China between 2012 and 2016.
Asian Metal: Welcome to join the interview. Please introduce your company main business briefly at first.
Chandresh: We started bauxite export in 2012 and sold to China, the Middle East and Azerbaijan, etc. Our bauxite annual production capacity as of now is 1 million tonnes, which could expand to 2 million tonnes. We exported our latest vessel to China in May this year with a volume of around 50,000t.
Asian Metal: Chinese purchase demand for imported bauxite improves. What are the reasons behind?
Chandresh: I think there are two reasons. Firstly, the alumina production capacity in China increases and the demand for bauxite improves. Secondly, Chinese domestic bauxite supply reduces due to the local environmental protection and safety policy.
Asian Metal: What are the main advantages of Indian bauxite?
Chandresh: Indian bauxite is gibbsite, which is available for more alumina producers. On the other hand, the freight from India to China is cheaper, which is only around USD12/t right now, less than USD27/t from Guinea.
Asian Metal: Did the rainy season attack bauxite production in India during Jun-Sep this year?
Chandresh: The rainy season usually starts from the middle of May and would last for four months. This year, it is worse and might delay. Our bauxite mine sites are full of water and the road is destroyed. We usually could restart production in October but might delay to December this year.
Asian Metal: What is your outlook for bauxite production in Gujarat of India 2023-2024?
Chandresh: India stopped issuing new mining licenses from 1986 in Gujarat and resumed from 2021.There are a total of seven bauxite producers in Gujarat of India and the overall production volume is around 1.5 million tonnes this year, the same as last year, while the total annual production capacity could reach 5 million tonnes.
Asian Metal: What are the main challenges for bauxite producers in India?
Chandresh: We have 15% of export duty now. The export duty and royalty tax together account for around 40% of the FOB export price. Besides, the silicon content is high and we need to screen.
Asian Metal: When did LABH Enterprise start bauxite production and export? What is your plan for 2025?
Chandresh: We started bauxite production from 2006 and began exports from 2012. We target the production volume of around 600,000t this year, up from around 400,000t last year. We plan to launch a bauxite washing plant by November this year and would supply high grade bauxite Al2O3 49%min SiO2 2%max and the monthly production capacity could reach 200,000t. We plan to export around half a million tonnes of bauxite to China from this October till next May.
Asian Metal: Did India export bauxite to China before? What is the current export policy?
Chandresh: India started bauxite exports from the year of 2000. From 2011 and 2016, India could export around 10 million tonnes of bauxite per year, mostly to China. We once sold at USD42/t CFR China in 2016 but it was not workable after India issued 20% export duty on bauxite from 2017, as buyers could find cheaper bauxite from other countries. Now bauxite prices increase globally, which creates a new opportunity for us to restart export. We believe that India's bauxite exports to China is resuming. Besides, we received more inquiries from China, so I think our export volume would reach more than 500,000t next year.
Asian Metal: How about the demand for bauxite in the Indian domestic market? What is your outlook for the domestic demand growth in the coming three years?
Chandresh: Currently, India has four alumina producers with seven plants and consumes around 17 million tonnes of bauxite per year, which would improve by 50% in the coming three years, as many alumina producers plan to expand alumina production.
Asian Metal: How do you think of the bauxite price from India now? What is your outlook for the price in Q4, 2024?
Chandresh: The mainstream price right now is around USD65/dt CIF China and I think the price would reach around USD75/dt CIF China in the fourth quarter due to the demand increase.
Asian Metal: Wish your company a breakthrough in bauxite export next year!
Chandresh: Thanks for the invitation to your interview.
