Chrome ore and chrome concentrates exports from the country plummeted 58 per cent in 2017-18 to 95,000 tonnes, down from 225,000 tonnes in FY17.
The prevailing steep export tax of 30 per cent contributed to the drastic slide in export shipments. In value terms, exports of the chrome ore and its concentrate declined 45.4 per cent to Rs 1.90 billion at the end of 2017-18 as against Rs 3.49 billion in the preceding fiscal.
“Zero export duty for ferro chrome and the recent Supreme Court penalising mines owners for statutory violations has adversely impacted exports of chrome ore and chrome concentrates in 2017-18. That apart, the high export duty of 30 per cent has wiped out the viability of Indian production in international chrome ore trade,” said an industry source.
Barring 2016-17 when there were some noticeable exports of chrome ore or concentrates, exports of the material in the previous years were negligible.
Between March 1 and May 25 2016, the export duty was waived off but by the time the mine owners and exporters could ramp up output and re launch exports, the duty was re imposed. The re-imposition of 30 per cent duty dented exports.
Exports of chrome ore and chrome concentrates in the country is canalized through state owned trading company MMTC Ltd. On exports of chrome ore, there is a quantitative cap of 0.3 million tonnes and exports cannot breach this level.
There are no curbs on exports of chrome ore concentrates as they are processed using low grade ore (chromite content below 42 per cent) and has no direct application in the ferro chrome industry.
A host of factors like delay in renewal of mining leases, environmental curbs, Supreme Court's pronouncements triggering disarray in mining and on top of that, the prohibitive 30 per cent export duty has adversely hit exports of chrome ore and concentrates. As Indian chrome ore and chrome concentrates has turned unviable in the export markets, many small to medium processing units have been forced out of operations. The same situation is expected to spill over to the future unless the existing duty on chrome ore is rationalised.
With exports no longer lucrative, the inventory of low grade chromite which has no use in the domestic market, has piled up to 2.5 million tonnes at mine heads by the end of 2015-16. Low grade chromite has no direct use in the ferro chrome industry and hence, gets accumulated. Besides this, the infrastructure created to enrich it into chrome ore concentrates also lies under utilized due to fragile demand.