The government proposes to tighten its control on the mining sector through fiscal measures aimed at checking exports of iron ore to the lucrative Chinese market. The steel ministry is working on a proposal to increase the export duty on iron ore from the present 20% to 30% to enhance export deterrence.
While the ministry maintains that the rationale behind such a hike is to ensure sufficient supply of raw material for the domestic steel industry, the move also aims to check illegal mining as it continues to flourish in China.
“We are looking at another 10% hike across the board in iron ore export duty. The draft of the proposal is being worked out and would be discussed with the commerce and finance ministries,†a steel ministry official said.
The iron ore miners and exporters, however, are against any move to further raise duty on iron ore. According to iron ore exporters, most of the ore moved out of the country is in the form of fines and is not of much use to the domestic steel units as they do not have facilities to utilise them. Moreover, the country produces over 220 million tonnes of iron ore, only half of which gets consumed in the domestic market.
“We are already struggling because of unavailability of the material. Most of the domestic units use iron ore lumps and not fines. There has to be a balance in exports and domestic consumption,†said an exporter.
Leave a Reply