Steel Min demands hike in export duty on iron ore

The Steel Ministry today demanded raising export duty on iron ore to increase domestic availability and rein in spiralling prices.

Apart from the option of hiking prevailing export duty, "quantitative restrictions" on exports could also be imposed, it said.

"...The government will have to look at the question of exports (iron ore) differently by bringing in definite deterrence. This may be in the form of either prohibitive duty or quantitative restrictions," Steel Minister Virbhadra Singh said during a Ficci steel summit.

Currently, iron ore lumps attract an export duty of 15 per cent and iron ore fines a duty of 5 per cent.

"The government (recently) has taken a few policy measures to discourage avoidable exports of iron ore and consequently raised domestic availability by increasing export duty on lump ores to 15 per cent," Singh said.

To smoothen the supply of vital inputs for steel like iron ore and coking coal, he said, the Steel Ministry was in close contact with the Ministry of Mines in the formulation of a new Mining Policy. A new Mining Policy Bill will be presented for Parliamentary approval soon, he added.

Iron ore and coking coal prices have surged as much as 90 per cent compared to the year-ago period, adding to the input cost of steel makers.

Singh's remarks came in the wake of supply bottlenecks in global markets and strong demand from China, India, especially for minerals of Australian origin.

Singh regretted that the Indian companies, particularly those in the public sector, had lagged behind in investment in mining assets as "they possibly woke up later to the harsh reality that supply of coking coal could take such a dimension. It is time for the Indian steel and mining companies, whether in the public or private sector, to look for opportunities overseas more seriously."

Secretary Steel Atul Chaturvedi pointed out that the Joint Plant Committee (JPC) of the Steel Ministry has undertaken a massive exercise of mapping out the infrastructure requirements of the steel companies.

Moreover, Chaturvedi said land acquisition for steel projects continues to pose a major challenge and asked industry players to consider using the large land mass that is currently available with the closed units.

"I have asked the Ministry of Heavy Industry to map out such land masses and put the information on their website for the benefit of prospective investors. I hope Ficci will coordinate with the Ministry of Heavy Industry to take the process forward," he said.