Miners seek rollback of export duty on iron ore

Written by fe Bureau | New Delhi | Updated: Aug 1 2013, 02:22am hrs
Hit hard by curbs on production and export of iron ore, the countrys leading mining companies have sought the prime ministers intervention for a complete rollback of the 30% export duty on the raw material, which the finance ministry levied in December 2011. In a memorandum to the PM, miners have said the duty has become a big burden on the industry due to a slowdown in the sector, and that it would render the sector sick if immediate steps were not taken for its withdrawal.

Exports from India have become unviable after the imposition of export duty. Consequently, production and export of iron have drastically fallen to 140 million tonne and 18 million tonne, respectively, in 2012-13, Federation of Indian Mineral Industries (Fimi) has told the Prime Minister.

Economic activity in mining areas has come to a grinding halt following a Supreme Court ban in Karnataka and Goa. Global majors, such as Posco and Arcelor-Mittal, have pulled out of their projects due to delays in approvals. Fimi said that investments in exploration and mining have dried up, causing loss of revenue to the Centre as well as the state government. Domestic steel companies, such as JSW Steel, Kalyani and several others, are reviewing their investment plans.

The industry is also opposing the government proposal to jack up the royalty rates on minerals by 100%. These companies say that any further increase in royalty rates would lead to not only a loss of revenue to state governments, but also affect employment for thousands.