Centre’s decision to impose 15 per cent export duty on iron ore has worried Goa’s mining lobby, which fears that the industry may face a severe setback on this account.
The duty, effective from June 13, 2008 is applicable to all kinds of iron ore, irrespective of its iron content. The Central government in its circular had said that the duty structure is changed to further strengthen a policy regime that enables conservation of good quality ore and ensures its availability to domestic industry at a reasonable price.
But the mining lobby in this tiny coastal state has several apprehensions regarding the move.
“The increase will severely impact Goan iron ore industry,” Goa Mineral Ore Exporters Association President Shivanand Salgaonar told reporters here while briefing presspersons in presence of Chairman and Managing Director of Dempo group of companies, Srinivas Dempo, Sesa Goa managing director P K Mukharjee and others.
The increased duty will force the producers to stop extraction of low grade ore and its export, Salgaoncar said. “This will affect the mining industry in particular and Goan economy in general,” he said.
Any effort to curb export of iron ore, without matching domestic consumption for the ore currently produced would severely affect the iron ore industry and the employment and economic activity dependent on it, he added.
Goa is India’s largest iron ore exporter with 105 active mining leases and exports touching a mark of 33 million tonnes annually.
The exporters contend that the current iron ore production in India is more than sufficient to meet the needs of the domestic steel industry.
“There is in fact a large surplus of production over domestic consumption and there is ample availability of iron ore resources in the country,” Salgaoncar said.
The mine owners and exporters have objected to the heavy tax on the low grade ore as Indian steel industry consumes high grade lumps and fines.
“Goan iron ore is of lower grade which is unfit for consumption by steel industry hence there is necessity of exports,” he said, adding that “Goan iron ore producers have no option other than export. These fines, if neither utilized within India nor exported, could pose environmental problems when stored?.