Amid a sharp fall in global prices of iron ore, miners from Goa have sought a further reduction in the 10% export duty on low-grade ore produced in the coastal state as well as removal of what they call duplication of certain (welfare) levies.
Finance ministry sources said any decision on lowering export duty will have to be taken in a holistic way keeping in mind the need for supporting domestic consumption of the raw material.
Vedanta Resources has resumed mining at its Codli and Bicholim mines in Goa this week, while Salgaocar, Fomento Resources, Chowguel Mines and Bandekar Brothers are in the process.
Industry majors want removal of both central and state-level levies impacting their competitiveness at a time global price of the ore, especially of the low-grade, have crashed by more than 60% in last six months to about $32 per tonne. The price fall was in line with the diminished appetite for the resource from China, a major purchaser.
According to sources, export realisation at present after all the central and state levies and other costs is a profit after tax of R24 tonne.
Miners are also hit by the dual levies of 10% towards Goa Permanent Fund (GPF) mandated by the Supreme Court while lifting the mining moratorium in the state. The levy was introduced as a means of ensuring inter-generational equity, with the state being allowed to access only the interest from this fund to be used for sustainable development of the state.
Mining companies say they are already required to contribute an amount equal to a specified percentage of the royalty payable, to District Mineral Foundations to be set up in each state under the MMDR Act. Since this fund is for the benefit of the affected community, miners want the GPF payment requirement to go. Vedanta’s plea for its lifting is pending in the apex court.