Iron ore pellet industry opposes export duty

Iron ore pellet manufacturers today cried foul over government's decision to impose 5 per cent export duty, terming the move "retrograde".
"Imposition of export duty on pellets is a retrograde step and is completely unwarranted. The duty has been levied without taking into consideration the views of PMAI and is based on erroneous facts," Pellet Manufacturers Association secretary S K Chatterjee said in a statement.
"Pellet manufactures strongly feel that the government is playing into the hands of a handful of steel makers. We urge the government to reconsider their decision and exempt pellet from export duty," said the industry body.

Jindal Steel and Power, a big iron ore pellets producer, said the move could have been avoided as the material is manufactured by using waste material (iron ore fines) and India would be deprived of valuable foreign exchange.
"It should have been avoided, it will affect huge amount of foreign exchange. You export 20 billion tonnes of pellets. If it is sold at USD 160 per tonne FOB, you would have brought on USD 4 billion. You make pellets out of the left over items, iron ore fines, which can not be used in blast furnace," JSPL Managing Director and CEO Ravi Uppal said.

Pellets are value-added products of leftover material or low grade iron ore and are used in steel-making. In recent times, they have emerged as a major product for iron and steel industry in the country due to scarcity of ore in some regions following mining bans in Karnataka and Goa.

According to PMAI, India's pellet production capacity increased to about 60 million tonne from 28 MT of 2010-11 as government encouraged value addition of iron ore fines.
Of the total pellet production, current exports is over 1 MT only and accounts for 1.2 per cent of the installed capacity, the PMAI further said.

It added that "current capacity utilisation of pellet industry is less than 50 per cent owing lower off-take by the steel industry. Then why punish the pellet industry?"
Yesterday, government imposed 5 per cent export duty on iron pellets, saying that "in April-November 2013, exports of iron ore pellets have risen sharply, causing an apprehension about shortage of iron ore in the country".
Export of raw iron ore or fines and lumps already attract an export duty of 30 per cent.