Honorable Finance Minister Mr. Arun Jaitley presented the Union Budget today (29 Feb’16) in the Parliament. In a welcome move to support low grade iron ore exports from India, Indian govt. has completely removed the export duty on low grade iron ore.
Export duty on low grade iron ore fines (less than Fe 58%) export duty was at 10% which has now been removed to nil. Also the export duty on lump of low grade (less than Fe 58%) was 30% earlier which has now been scrapped to nil.
However, export duty on high grade ore (Fe 58% & above) remains unchanged at 30%.
Prior to this, to boost exports and revive Goa mining industry, the govt. reduced export duty on low grade ore from 30% to 10% w.e.f. June’15.
Goan iron ore miners were suffering hard from decline in global iron ore prices, high export duty and other taxes. Owing to this they had earlier requested the Indian govt. for removal of export duty on low grade iron ore.
Since Feb’15, monthly average iron ore fines (Fe 62%) prices have fallen sharply by USD 16/MT, CFR China in Feb’16. Goan iron ore exports also fell drastically and stood at 0.61 MnT in last fiscal.
In current scenario, ex mines realisation of Goan fines (Fe 57%) will be approx INR 1,134/MT. And ex-mines realization of fines (Fe 57%) from Odisha is around INR 400-500/MT. Prices of Indian fines (Fe 57%) is at USD 38/MT, CFR China.
Cost Analysis of iron ore export from Goa
|
Particular |
Prices | |
| In INR |
In USD |
|
| FoB India (Fe 57%) fines | 2,055 | 30 |
| Goa Iron ore Permanant Fund@ 10% | 205 | 3 |
| Moisture@4% | 82 | 1.2 |
| Royalty @ 15% | 103 | 1.5 |
| DMF @ 30% of Royalty | 31 | 0.5 |
| Road Freight | 250 | 3.7 |
| Local Handling | 250 | 3.7 |
| Ex-mines realisation | 1,134 | 16.6 |
FoB price as per index as on 29 Feb’16
1 USD=68.5 INR
Source: SteelMint Research
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