August 05,
Indian Iron ore exporters would still generate a net realizable value (NRV) of 12-39% if export duties on Iron ore were increased by 5%, Suresh Kumar, vice president of shipping and project for MSPL, a producer with mines in Karnataka state, said.
Assuming FOB prices of $115/MT, a 10% increase in export duty would still mean a NRV of 6-33%, but could affect around 12 million MT of higher cost exports, mainly out of Gangavaram and Vizag ports on the east coast.
In a base case scenario of 0-10% in tax hike, India would continue to export around 100 million MT of Iron ore per year, he added.
Currently, prevailing export duties on Indian Iron ore include a 5% tax on fines and a 15% tax on lump.
The vast majority of Iron ore shipped from India costs between $70-90/MT, including mining and logistics.
India exported 120 million MT of Iron ore in 2009, of which 107.5 million MT went to China. During that year, Indian Iron ore accounted for 17% of China’s imports. About 90% of India’s Iron ore exports are fines.
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