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Centre may cut duty on Goan iron ore |
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Kolkata: The government is considering a reduction in export duty on iron ore produced in Goa, a move aimed at injecting life into the industry that has remained shut for nearly two years in the state which has been the country's largest exporter of the mineral.
If finalized, the measure could help put in place a differential duty structure for iron ore exports depending on grade. Iron ore produced in Goa is typically low grade ore with iron (Fe) content of less than 58%, most of which has been exported.
The export duty on iron ore could be brought down to about 10% from 30% at present for ore with up to 58% Fe content.
"We have said that Goa's ore is different from the ore found elsewhere in the country. The finance ministry should look at it differently. We can hope of something before the budget," said Union steel and mines minister Narendra Singh Tomar.
The state's iron ore mining industry, which came to a grinding halt following the crackdown against illegal mining, is poised to resume operations in April.
Sesa Sterlite, one of Goa's largest exporters, welcomed the move. "We welcome it. Iron ore prices have crashed so much in the last few months and Goan grade of ore is being sold at about $30 per tonne. So, it is critical to withdraw the export duty to support resumption of Goan iron ore industry," said A N Joshi, vice president-corporate affairs of iron ore business at Sesa Sterlite, while stating that his company was not aware of the development.
Most of ore produced in Goa used to find its way to China since Indian steelmakers had, until recently, not invested in required technology to utilize low-grade ore. The mining crisis has forced companies such as JSW Steel to buy ore from Goa.
Commenting on the government's move, Seshagiri Rao, joint managing director and group CFO of JSW Steel said, "It is more of a pricing problem than non-usability of Goan ore. We have been using it of late and, similarly, Indian steelmakers could invest in beneficiation projects to utilize Goan ore. We have always maintained that our natural resources should be made available to domestic steel companies."
Kalyani Steel's managing director R K Goyal also questioned the government's move, saying, "We are of the view that the government should not promote export of raw material. If we are assured of availability and long term supplies, we are willing to undertake investments in a beneficiation plant of up to Rs250 crore to utilize the ore."
But global ore prices, including those of the prime grade (Fe 64% and above) have dipped to record lows in recent months. This is likely to pose a stiff challenge to Goan exporters.
Source : timesofindia.indiatimes.com
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