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Miners upset as export duty slapped on iron ore
The iron ore mining industry is fuming over an unexpected export tariff hike on iron ore fines and lumps categories.
The iron ore mining industry is fuming over an unexpected export tariff hike on iron ore fines and lumps categories.
The 5 per cent hike, coming at a time when the domestic mining sector was just emerging from the shadows of the global meltdown, has been lauded by the steel industry, where iron ore is a key raw material.
Iron ore fines would now attract a 5 per cent export duty, and duty on lumps has been doubled to 10 per cent.
"The increase comes at an absolutely wrong time as exports had just begun to increase," said R.K. Sharma, secretary
general, Federation of Indian Mineral Industries. "This puts us at a disadvantage with Australia and Brazil. The government should not be concerned if an industry is making money... we pay all taxes, and it means an increase in revenue."
With increased demand, the price of iron ore fines in the spot market has risen to $ 85-90 per tonne. It was ruling about $ 50 per tonne in the first half of the year, as steelmakers the worldover cut production.
The domestic steel industry, which has been demanding a permanent curb on export of ore, welcomed the move adding that more needed to be done.
“This is a long-term demand of the steel industry and is a good step,” said Seshagiri Rao, joint managing director and group CFO, JSW Steel, the country's largest private sector steel company. “The domestic industry needs to get ore first not Chinese steelmakers. But a long-term policy is required; a mere duty hike will not suffice.”
Iron ore exports from India have increased by 20.8 per cent at 53.22 million tonnes in April-October, 2009, against 44 million tonnes last year. Ore exports had stagnated last year owing to the global recession.
