Iron ore producers may get
incentives in the next Budget for adding value to the mineral, a move aimed at
encouraging its conservation for domestic use.
“The government may announce
incentives for the iron ore miners to encourage more value-addition and
pelletisation. The Steel Ministry has already sent a proposal to the Finance
Ministry in this regard,” a source said.
The government in the previous Budget
had raised the export duty on iron ore, both fines and lumps, to 20% which was further
increased to 30% towards the end of 2011. However, it had fully-exempted
exports of iron ore pellets from any duty.
Pellets are produced in globules
form from very fine iron ore and mostly used for the production of sponge iron.
However they are also used in blast furnaces in some countries.
Sources said the government is
considering providing tax- holidays to miners to encourage setting up pellet
capacities. They, however, he did not go into the specifics.
Though India is the one of the
top exporters of iron ore in the world, its pellet making capacity is nothing
significant. Against the world's 388 million tonnes of pellet production in
2010, India's contribution was just 18 million tonne.
Sources said around 25 million
tonne pellet capacity is in the pipeline in the country and if government
provides further incentives to the miners, more capacity would certainly come.
Source: Business Standard
Leave a Reply