Indian Chrome Ore and Concentrates Exports Fall 58% in FY’18

Low-grade chrome ore and chrome concentrate exports from India fell sharply by 58% in FY18. Total volumes exported in last fiscal were only 95,000 MT, down from 225,000 tonnes shipped in FY17.

Industry sources blamed the steep export duty of 30% for the shrinking exports. While Ferro chrome exports attract nil duty, exports of low-grade chrome ore (chromite content of 42%) and the concentrate is levied a tax of 30%. The low grade chrome ore is unsuitable for direct use in the ferro chrome industry and without exports, the material has been accumulating at the mine heads, posing a risk of an environmental hazard. At the end of FY17, an inventory of 2.5 MnT of inferior grade chromite had piled up since exports had turned unviable and Indian chrome ore had lost the plot in international trade.

In FY18, total chrome and concentrates exports were valued at INR 190.8 crore, down by 45% when compared with exports worth INR 349 crore that happened in FY16.

Apart from the prohibitive duty structure, the recent Supreme Court pronouncements directing errant miners to cough up compensation for excess production and reprimanding them for violations of statutes had an adverse impact on exports. The downtrend in exports has triggered the closure of many small to mid-sized chromite processing units. Delay in obtaining environment and forest clearance have also contributed to the plunge in overall output and exports of chrome ore and its concentrates.

Barring 2016-17 when there were some noticeable exports of chrome ore or concentrates, exports of the material in the previous years were negligible. Between March 1 and May 25, 2016, the export duty was waived off but by the time the mine owners and exporters could ramp up output and re launch exports, the duty was re imposed. The re-imposition of 30 per cent duty dented exports.

Low grade chromite has no direct use in the ferro chrome industry and hence, gets accumulated. Besides this, the infrastructure created to enrich it into chrome ore concentrates also lies underutilized due to fragile demand.