India-world’s 3rd largest iron ore exporter in FY10 has witnessed subsequent reduction in iron ore exports over past few fiscals.
Iron ore export from India which were recorded at 97 MnT in FY11 had fallen drastically to 4.8 MnT last fiscal. Prime reasons behind decline in export were- mining ban imposed in Goa over illegal mining, high iron ore export duty and distance based charges. Iron ore export from Goa was recorded at 0.61 MnT in FY15.
However, in this fiscal Indian govt. has adopted a number of measures to boost iron ore exports from India like-
- Reduction in iron ore export duty on the ore exported by NMDC to Japanese and Korean mills under LTAs by 20%
- Reduction in Distance Based Charges (DBC) on iron ore exports from India
- Cut in iron ore export duty of low grade fines to 10%
And as a significant move to raise iron ore export, Indian govt. has completely eliminated the export duty on low grade iron ore in the budget presented yesterday (29 Feb’16). Thus, the iron ore export duty on low grade (less than Fe 58%) is nil for both fines and lump.
This welcome move of Indian govt. has given huge relief mainly to the exporters in Goa which majorly produces low grade ore and exports it majorly to China.
Talking about this fiscal, India has already exported 4.3 MnT iron ore (till Feb’16). Out of this, share of export from Goa is about 62% (2.71 MnT). As per reports, Goa Chief Minister- Mr. Laxmikant Pareskar has welcomed the removal of duty and has told to the Goan mining industry to start mining as soon as possible. Things are likely to turn optimistic as participants expect the e-auctioned ore to exported and miners in Goa to resume fresh mining in full swing.
Considering improving prospects in Indian iron ore export, SteelMint anticipates that Indian iron ore export in FY16 may stand at 5-5.5 MnT. Goan exporters (primarily Vedanta, VM Salgaonkar, Fomento Resources and Royalline Resources) are likely to raise export to China. NMDC will also export iron ore under its LTAs and there are chances that exports from Odisha may also pick up.
Thus, as per Steelmint analysis in the forthcoming fiscal (FY17) iron ore export may cross 10 MnT mark and may be recorded around 10-15 MnT.
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