 "Assocham requests Centre to levy 30% export duty on iron ore pellets")
The industry body today called on the Minister for Commerce and Industry Nirmala Sitharaman and submitted a memorandum while suggesting the new regime to impose 30% export duty on iron ore pellets. "As the export of iron ore pellets rose to a whopping 1.5 million tonnes (mt) in fiscal year (FY) 2013-14 as against negligible amount in 2012-13, we have urged the Centre for raising export duty on iron ore pellets in order to ensure iron ore security to India's steel industry," Ravi Wig, senior Assocham managing committee member was quoted as saying in a press release.
Currently iron ore pellets attracts 5% export duty against zero duty imposed earlier this year. Export duty on iron ore and fines is collected at 30% of selling price.
"Exports of iron ore pellets is not only draining India's mineral wealth but is also causing significant revenue loss to the country," said D.S. Rawat, secretary general of Assocham.. Iron ore production in India has fallen significantly in recent years from a level of 218 mt in 2009-10 to 144 mt MT in 2013-14 and is expected to drop further to 100 mt in 2014-15 against the demand of 140 MT. The drop in iron ore production is expected mainly due to reduced or no production of iron ore from states like Goa, Karnataka and Odisha after the ban imposed by the Supreme Court.
Hence, Assocham suggested the Union government to maintain 30% duty on export of iron ore (lumps and fines) as well till the time iron ore shortage situation in India normalises. The chamber has also pitched for halting iron ore exports by state-run National Mineral Development Corporation (NMDC) until there is normalcy in the industry. Pellet producers and iron ore exporters have blamed the government that due to imposition of duties, nearly 120 mt of mineral are stacked at mining pit heads. But Assocham set aside such allegations saying such figures are "myth' and are misrepresentation of facts. .
"The iron ore prices in India have escalated by 20-25% while globally prices have decreased by up to 30% since April 2013," it said in a statement questioning how prices can rise when there is abundant supply. Due to unavailability of iron ore, there has been a sharp decline in steel capacity utilization which declined to 77% in 2013-14, from 88% in 2010-11. Moreover, India imported 5.7 MT steel in 2013-14 to fulfill the domestic requirement. . "There is a strict need to conserve this exhaustible natural resource which is available in limited quantity instead of exporting it to achieve the target of 300 mt crude steel capacity,"Rawat said.