Goa government is delaying E-auction of Iron ore on hopes that export duty on low grade ore may be reduced in coming budget session. The current export duty on Iron ore is 30% on ad valorem. When the duty was imposed in 2012, international prices of Iron ore were as high as USD 175-180/MT.
Goa, which largely produces low grade ore ( Fe 48-58%) has seen deteriorating response in last few E- auction over falling Iron ore prices in global market.
“There is little response for low grade ore from exporters over falling global prices and domestic mills do not prefer ore less than 60%. Out of 5.40 MnT Iron ore auctioned since 17 Feb, 2014 only 0.62 MnT has been exported. We are hoping that duty may be cut on low grade ore in coming union budget.” said a source close to this matter.
Trade analysts also justifies it a logical step as there is no viability in exporting low grade ore and domestic mills do not want it. With Goa government renewing more mining leases, it can only help Indian government to start exports which will fetch them good revenues.
High export duty had resulted in India losing market to Australia and Brazil globally which would be hard to regain. Indian iron ore exports have declined to 14.42 MnT in 2013-14, 18 MnT in 2012-2013 and 117.37 MnT in 2009-10.
With India expected to export only around 5-6 MnT of Iron ore, the country is set to become a net importer of the mineral as imports are set to touch 11-12 MnT in 2014-2015.
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