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`Scope for FDI in china clay industry'

Our Bureau

CALCUTTA, Aug. 13

TWO mineral economists of the Indian Bureau of Mines, Nagpur, Dr. K.K. Chatterjee and Dr. S.S. Bhake, in a recent study on demand & supply and export prospects of china clay, have indicated enormous scope for foreign direct investment in India in the mi ning and technology upgradation of processing of china clay. China clay is an industrial mineral containing predominantly kaolinite, whose properties are improved further in subsequent processing.

The study has projected a rise in demand for processed china clay in the country by 2001-02, to 3.53 lakh tonnes (lt) from 2.96 lt in 1999-2000. Similarly, the demand for crude china clay has been projected to increase to 2.36 lt from 1.7 lt in 1999-2000 .

During 1999-2000, crude and processed china clay production in the country was at 5.95 lt and 1.56 lt respectively. Stating that the future world market for processed china clay would be In the paper industry, the study has indicated that if India has to compete in the world market, the existing processing facilities have to be improved in a big way. China clay with high quality standards was now preferred in the international market.

The total demand of run-of-mine crude by end-use plants consuming crude china clay, and the crude processing plants in the country by 2001-02 (in the organised sector) was likely to be around 14 lt.

Processed china clay in India is consumed mainly by the ceramics sector. Besides ceramics, the other industries which consume this mineral in substantial quantities are paper, paint, plastics and rubber. Crude china clay is consumed mainly by the cement units, and insecticide and refractory sectors.

Minor uses are in pharmaceuticals, cosmetics, textile, ink, ultramarine, fibre glass, soaps and detergents. Globally, china clay is used mainly in the paper industry. Besides due weightage to individual industries, technological changes, shift in technol ogy, new uses, substitutes and various expert opinions have also been considered while making the demand projections, say the economists.

Bulk of the production is consumed within the country. Designated as a medium-value mineral, there are no restrictions on exports and imports of china clay. Exports are confined mainly to neighbouring countries like Bangladesh, Nepal and Sri Lanka. China clay trade globally is done in processed form and the major suppliers in the world now are the US, the UK, Brazil, China, Czech Republic, Germany, France, Australia and Turkey.

The study has called for systematic efforts to increase exports to traditional markets like Bangladesh, Sri Lanka and Nepal besides Ethiopia, Kenya, Philippines, UAE, Saudi Arabia, Bulgaria and Bahrain.

The potential untapped export markets for Indian china clay are said to be in Taiwan, Finland, Japan, Italy, Germany, Canada, Netherlands, Republic of Korea, Spain and Sweden. Giving an overview of the country's reserves position, the study points out th at out of the 10,420 lt of recoverable china clay reserves in the country, some 71 per cent was located in West Bengal, Rajasthan, Orissa and Kerala and the remaining reserves are spread over in 15 different States. Most of the reserves are in "possible and probable" categories with a meagre four per cent in the proved category.

Quality-wise, the reserves are classified into different grades as per the end-use consumption, of which six, namely, paper/textile, insecticide, chemical, ceramic/pottery, paper filler and rubber are well defined. Eighty-two per cent of the reserves are in the not known, mixed, unclassified and other grades which need to be further classified as per end-use consumption through further exploration studies.