Indian mining industry has assured adequate supply of iron ore to Chinese steel mills, which are reported to have boycotted the raw material’s supply from Brazilian mining major Vale after it asked for a price revision in the contracted prices for 2008-09.
Indian miners have requested the government to abolish the 15 per cent export duty and reduces freight charges so as to facilitate the trade.
“We are ready to do our bit to relieve the Chinese mills and will try to fill the gap created after the steel association there decided not to import iron ore from Vale,” said Federation of Indian Minerals Associations Secretary General R K Sharma.
Chinese steel body CISA Executive Secretary-General Shan Shanghua was quoted by country’s online news portal Chinastakes.com, as saying, “China will not import any iron ore from Vale as the Brazilian company was in unilateral breach of the contract.”
Earlier this year, Vale had agreed on a long-term contract with Chinese steel companies for supply of iron ore for the present year. However, it recently asked for an upward price revision in the contracted prices, which sparked discontent in the Chinese steel sector.
“Chinese steel makers won’t accept Vale’s price hike,” he said and added they would look for domestic miners and other alternate options.
Indian miners exported over 90 million tonnes of iron ore to Chinese steel mills in the spot market in the last financial year.
However, with the government imposing a 15 per cent ad valorem duty on iron ore exports in June, miners say the shipments have declined by nearly 30 per cent.
“If the iron ore industry is to be given a fillip, the government will have to withdraw the export duty and lower freight charges,” said an Indian merchant miner not willing to be quoted.
According to FIMI, the apex body of domestic iron ore miners, removal of export duty would add foreign reserves to the tune of about $5 billion to the government coffers by the end of this fiscal.
Chines steel companies import about 100 million tonnes iron ore from Brazil every year.
