India's MOIL Limited, formerly Manganese Ore India Limited,
was seeking a five-fold increase on import duties on manganese ore, taking the
import duty to 10% from its current rate of 2%.
MOIL currently accounted for around 50% of the India’s total
2.86-million ton of ore mined in 2010/11.
Data sourced from Indian Mines Ministry has revealed that
the total manganese import into the country was 797 933 t during the period of
2009/10.
If the Indian government acceded to MOIL's demand for a
import duty hike, it would deal a severe blow to the manganese ferro alloys
industry, already reeling from high imports of alloys at a low duty of 5% and
high power tariffs resulting in capacity use falling to 80% of installed
capacity.
“Previously, ferro alloy producers were importing manganese
ore, converting it into ferro alloys and exporting it back to overseas markets.
But now with low demand in overseas markets, ferro alloy producers are selling
in domestic market, resulting in oversupply situation,” MOIL officials said.
“This oversupply has pulled down prices of manganese ore by
43% since January 2011. Currently manganese ore price is down to $182/MT in the
domestic market,” the officials added.
But according to the Indian Ferro Alloys Producers' Association (IFAPA), a hike in import duty on manganese ore would make domestic
production of manganese ferro alloy further uncompetitive compared to imports
which has been steadily rising on back of low import duty on alloys.
Furthermore, the oversupply of manganese ore in the domestic
market was temporary and against the backdrop of projected steel production in
the country, supply of manganese from domestic mines would move into a
shortfall position over the next two years, IFAPA said.
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