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Iron ore export from Goa is set to resume, following Finance Minister Arun Jaitley’s proposal to abolish export duty on the steel making raw material.
Currently, iron ore fines and lumps with iron content below 58 per cent attract export duty of 10 per cent and 30 per cent, respectively. These duties are to be ended.
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With the free fall in iron ore prices and numerous state and central levies, export of ore has been unviable. As a consequence, the government of Goa’s auction of around 16 million tonnes of low-grade ore yielded poor response, with around half the offered quantity not sold. The ensuing auction of eight mt unsold ore is now expected to get a good response. “We were waiting for the government to abolish export duty on low-grade ore. Since domestic steel mills do not procure such ore, it is exported,” said Shivanand V Salgaocar, President, Goa Mineral Ore Exporters Association (GMOEA).
Mining of iron ore and its export thereupon had stopped in September 2012, after the environment ministry’s decision to withdraw clearances for mines in the wake of the M B Shah commission's report on illegal mining. The clearances were reinstated in March 2015 but export was unviable, as has been explained, due to the export duty and a sharp fall in its prices in global markets. “Resumption in exports will also help revive the transportation industry, trucking and barges, which has suffered badly for the past three and a half years,” said Salgaocar.
A senior official with the state's department of mining and geology said: “The abolition of export duty will not only revive mining and allied activities in the entire value chain but also the economy of Goa.”
After the Centre’s move, the state government is considering a rollback in various levies, which amount to 10-15 per cent. “The benefit, however, would depend upon how fast miners grab the opportunity. If they resume operation immediately, they would get full benefit,” said R K Sharma, secretary-general, Federation of Indian Mineral Industries. In the pre-ban era, Goa’s annual iron ore production was 95 mt, of which around 85 per cent was below the 58 per cent grade of ferrous content.
After the Shah commission’s report, the Supreme Court has capped the state’s annual ore output at 20 mt. It has also told state to distribute the iron ore production limit on individual miners evenly, depending on their annual production before 2012. A petition for an increase in the production cap to 30 mt for Goa is pending before the SC.
