Having aproached the ministries concerned in vain with its demand for reducing the export duty on low-grade iron ore to nil, Goa Mineral Ore Exporters' Association (GMOEA) has now sought Prime Minister Narendra Modi's intervention in the matter as a “last resort”.
Having aproached the ministries concerned in vain with its demand for reducing the export duty on low-grade iron ore to nil, Goa Mineral Ore Exporters’ Association (GMOEA) has now sought Prime Minister Narendra Modi’s intervention in the matter as a “last resort”.
With a huge boom for steel production in China, miners in Goa had a dream run for many years prior to the mining ban in October 2012 imposed by the Supreme Court. Though the apex court lifted the ban in April 2014, the industry is till now struggling to resume operations in full and export their low-grade ore, which do not have much takers domestically.
Though export duty on their kind of ore has been reduced to the present 10% in June last year from 30% earlier, the fall in the price of the ore to $21 per tonne now from $119 as a result of shrinking Chinese appetite has made exports unviable putting a question mark on their future.
“Having exhausted all options at various levels of the government with respect to withdrawal of export duty on iron ore, we now request your kind intervention in the matter to ensure that our genuine request is considered and acted upon,” GMOEA president Shivanand Salgaokar wrote in the letter addressed to the PM.
The iron ore industry is also highly taxed. Compared with Australia and Brazil’s 2-7.5%, Goan miners are burdened with over 40% tax pay out. These taxes were levied or increased when the price of the commodity was at its peak. Salgaokar said these taxes are no longer sustainable in the current situation of low prices.
“Australia and Brazil are also benefited by the depreciation of their currency by 30-70% compared to only around 10% of the Indian rupee. On its part, in the light of the falling iron ore prices, the Australian government has withdrawn the mineral resource tax which they had earlier imposed and have deferred the collection of royalty on the current production,” Salgaokar said.
He added that exports of low-grade iron ore from Goa needs to be encouraged as it can fetch revenue to the tune of around $ 750 million a year as otherwise, the mined ores would be wasted. The e-auctions are also not yielding the desired results with only 19% of the offered quantity could find takers during the last seven auctions between August and November, 2015.
Goa used to export around 50 million tonnes of ore a year. While lifting the ban, the Supreme Court capped the production at 20 million tonne.