New Delhi, Aug 6 (PTI) India's bauxite production is expected to increase from 22.08 million tonnes in 2016 to 49.4 million tonnes by 2021, says a BMI Research report.

According to the report, bauxite production is projected to be at 26.1 MT this year, about 18 per cent higher than 2016.

The metal's production is expected to reach to 49.4 MT in 2021, the data showed.

"We forecast Indian bauxite production to grow from 26.1 MT in 2017 to 49.4 MT in 2021, averaging an annual growth rate of 17.5 per cent during 2017-2021, significantly higher than the annual average 3.9 per cent growth over 2012-2016," the Fitch Group company said.

India's bauxite production growth will accelerate to serve growing demand from the domestic aluminium industry, it said.

The growth is projected due to the five-fold increase in mining lease area in Odisha, the report said.

In 2016, the Odisha government agreed to supply bauxite to Vedanta Resources for the aluminium smelter at Lanjigarh starting March 2017 through the state-owned company Odisha Mining Corporation, it said.

"The Ministry of Mines increased the lease area for mining of bauxite from 10 sqkm to 50 sqkm in the state of Odisha to encourage development, and as part of the Union Budget, India reduced export duties for bauxite from 20 per cent to 15 per cent," the report said.

However, "despite this positive outlook for India's bauxite mining sector, tightening environmental regulations and tribal tensions pose downside risks by slowing down new projects," it added.

Bauxite is an important ore (a naturally occurring solid material from which a metal or valuable mineral can be extracted) of aluminium, a metal widely used by automobile industry, for making aircraft, among others.

Orissa, Gujarat, Jharkhand, Maharashtra, Chhattisgarh, Tamil Nadu and Madhya Pradesh are the main bauxite producing states in India.

Disclaimer :- This story has not been edited by Outlook staff and is auto-generated from news agency feeds. Source: PTI