Chrome Concentrate Makers Seek Roll Back of 30% Export Duty

The makers of chrome concentrate, a value-added version of low-grade chrome ore, have lobbied for the removal of the existing 30% export duty on the material. The producers feel while ferrochrome is exempted from export duty, the chrome concentrates which fetches attractive premiums in the export markets is needlessly burdened with a steep tax of 30%.

Federation of Indian Mineral Industries (Fimi), the mineral lobby body, is understood to have moved the Union finance ministry ahead of the Budget to eliminate the export duty. The high export duty has made chrome concentrate exports unviable in the international markets. Consequently, South Africa, Gabon and other chromite-rich countries have gained a strong foothold in the seaborne chrome trade where until a few years back India was a key player.

The concerns of chrome concentrate makers and Fimi stem from the accumulating inventory of low-grade chromite ore which is nothing but a waste dump for the ferroalloys industry. The stockpile of low-grade chrome ore (with chromite content in the range of 15-42%) has touched 2.5 MnT at mine heads (as on March 2017). Such lower grade chromite ore is not directly used by the ferrochrome industry which usually blends 70% higher grade chromite (48% and above) with 30% of concentrates. The infrastructure installed for beneficiating or enriching the lower grade ore remains underutilised as there is no demand within the domestic market and exports have turned un-remunerative.

“There is a need to provide a level-playing field to chrome concentrate producers and rationalize export duty on it, this will help utilization of installed capacity, provide employment to local people besides spurring economic development of the area where low-grade ore can be processed or beneficiated for exports. High-grade ore which is a precious mineral exported in the guise of ferrochrome must be restricted to safeguard domestic producers and the country’s economic interests”, an industry source said.

To boost mining and exports of chrome ore and chrome concentrates, the Union government in 2016-17 budget waived off the 30% export duty. However, the duty was re-imposed again on May 26, 2016, purportedly on pressure from the ferrochrome industry.

Ferro-chrome producers say chrome concentrates are already being used by the industry and the lower grade chrome ore (chromite content of 15-42%) needs to beneficiated.

The country’s domestic consumption of chrome is in the range of 2.4-2.5 MnT. The ferrochrome producers use friable chrome ore and chrome concentrates in the ration of 70:30. Production of one tonne of ferrochrome needs 2.4 tonnes of chrome ore/concentrates along with 3800-4000 units of power. Around 70% of the ferrochrome manufactured in the country is exported, mostly to China.

Figures: in metric tonnes.
Source: MCDR returns & Directorate General of Commercial Intelligence & Statistics.