Government accused of killing iron ore trade

By Anil Mathews (ScrapMonster Author)

January 25, 2016 10:07:19 AM

NEW DELHI (Scrap Monster): The Federation of Indian Mineral Industries (FIMI) has blamed the government for ‘killing’ the iron ore exports from the country. The trade body urged the government to seek immediate action to revive the industry. It called for Prime Minister’s intervention in removal of duty on iron ore exports.

According to FIMI Secretary General R.K Sharma, domestic demand for iron ore has virtually become zero. The imposition of duty has resulted in minimal exports out of the country. Sharma stated that many mining units are on the verge of closure. Immediate action by the government could only save the sector, he added. Sharma warned that non-action by government may lead to huge unemployment in mining sector.

FIMI urged the government to scrap the 10% export duty on iron ore fines with Fe content below 58% and the 30% export duty on iron ore lumps, irrespective of the grade. According to FIMI, the government is losing out millions of dollars in revenue due to heavy duty imposed on iron ore shipments out of the country. Removal of export duty is expected to contribute to higher revenues of at least $750 million per annum. The Goa Mineral Ore Exporters Association (GMOEA) has also written to the Prime Minister with respect to removal or lowering of export duty. The government had recently dropped 5% export duty on iron ore pellets, further to demands raised by certain miners to make the pellet trade more competitive.

Meantime, data released by Indian Ports Association (IPA) for the first nine months of the current fiscal indicates that iron ore shipments handled by the country’s top 12 ports plunged sharply during this period. The iron ore handled by these ports totaled 7.86 MT, almost 38% lower when matched with the volume of 12.67 MT handled during the corresponding period during previous fiscal. According to FIMI, the actual exports are much lesser, taking into account the fact that the above figure is inclusive of domestic shipment. The exports during the current fiscal are expected to decline hugely.