Build-up to Budget 2014-15: Will Budget bail out iron ore miners?
Thu Jun 26 2014, 18:06 hrs
The curb on exports of iron ore has not helped the domestic steel industry, which has imported about 5 million tonnes of ore in FY14. The mining industry has called for the abolition of export duty on iron ore in the Budget.
The mines ministry says lowering export duty would help the development of mining as an industry. The steel ministry too has asked that the duty be retained at the current levels. (Photo: AP)
In December 2009, the government imposed 5% export duty on iron ore fines and 15% on lumps, which was upped to 20% uniformly for both in Budget 2011. In December 2011, it was hiked to 30% ad valorem. (Photo: AP)
Consequently, iron ore exports fell from 117.37 MT in FY10 to 97.66 MT in FY11, 61.74 MT in FY12, 18.37 MT in FY13 and settled at 14.42 MT in FY14. (Photo: AP)
The investments made towards development of mines were futile as the export duty led to lower production, and mines either closed or witnessed a scaling down of production, the miners said in a presentation to mines minister Narendra Singh Tomar. (Photo: AP)
With more ore available, the steel industry, too, did not ramp up production fearing a glut-like situation. It ended up importing about 5 MT of iron ore to run existing capacities, the miners said, and called for making exports competitive by withdrawing duty. (Photo: AP)