Do away with duty on iron ore to help domestic industry: FIMI

Concerned over iron ore exports falling sharply to 14.42 million tonnes last fiscal, miners body FIMI has requested the Centre to do away with export duty to help the sector.

"In order that the resources are fully utilised, without detriment to the domestic steel industry, it is imperative to make Indian exports competitive by withdrawing export duty completely," Federation of Indian Mineral Industries has said in a letter to Steel and Mines Minister Narendra Singh Tomar.

"If export duty is withdrawn and railway freight is brought at par with domestic fare, we are sure, the exports of iron ore can go up to 70-75 MT per year," it said.

There is 30% export duty on iron ore and 5% on pellets at present.

The exports of iron ore, a key steel making raw material used to be about 100 MT, which declined to 62 MT in 2011-12, 18.37 MT in 2012-13 and finally 14.42 MT in the last fiscal on account of a number of factors including high duties, freight charges and ban on mining and exports from some states.

About 62 MT of iron ore fines are lying unused at mine heads in the country, FIMI said, adding that as the output is linked to exports, in the wake of declining exports, production too has taken a hit.

Domestic iron ore production has been on the wane and has declined to about 129 million tonnes in 2013-14 from 213.25 million tonnes six years ago.

FIMI also alleged that the "faulty policy of Odisha government" is behind the shortage of the key material.

"In case there is any shortage of iron ore in any part of the country, it is not because of incapacity of industry to produce more but because of faulty policy of Odisha government, which does not allow transport of more than 50% of the total production out of the state," FIMI said.

Odisha is the largest producer of iron ore in the country.

The miners' body said since the requirement of the steel industry in Odisha is not enough to consume even 50% of the ore produced in the state, stockpiles of the resource are lying at mine heads.

Domestic steel makers have often complained about shortages in the key steel-making raw material and have sought a ban on iron ore exports on apprehensions that the country may run out of the mineral if widespread overseas shipments continue.

About 1.6 tonnes of iron ore is needed to produce a tonne of steel.