Mines secy bats for rollback of export duty on iron ore

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New Delhi, Sep 30 : The mines ministry wants the export dury on iron ore to be rolled back and is opposed to further curbs on iron ore exports as it feels the domestic demand is not to so high at present.

Mines secretary Shantanu Consul said on Tuesday the export of iron ore at present will not be harmful for the country. “The demand for iron ore in the country is not so high that exports need to be curbed. If in future the domestic demand increases and there is a need to increase availability of iron ore in the country, exports can be curbed,” Consul said.

The secretary’s views are in sync with the recommendation of the Hooda Committee which had stated that there was no need to discourage export of iron ore and the issue of conservation of iron ore for domestic industry may be reviewed, if there is need for it after 10 years or so.

On June 13, the Centre had imposed a 15% duty on export of iron ore to increase domestic availability. There had been a proposal to hike it further. The iron ore community feels that profitability of the exporters will be sharply hit if the export tax is to be raised.

Such a measure is expected to hit the merchant mining companies in the private sector the most, a segment that has accounted for the bulk of the growth in the industry.

“Iron-ore prices have softened in the past few months and the export duty is a double whammy for the miners at a time when they need to cut cost to be competitive,” Consul said.

In the estimates of the Working Group on Iron and Steel for the 11th Five Year Plan, set up by the Planning Commission, the iron ore demand in the country in total is set to rise to 130 million tonnes by the terminal year of the plan period. Consumption of scrap has been forecast at 18 million tonnes.

In the context of external trade in iron ore, the current policy debate is largely centered on the issue whether there are sufficient iron ore resources in the country to feed the estimated growing demand of the domestic iron and steel industries and also to maintain exports at the current or a ‘reasonable’ level.