Miners call for removal of export duty on iron ore

The mining industry has sought the removal of export duty on iron ore and has claimed that the country has enough reserves to last for a period of 200 years.

The exports of iron ore with ferrous content of less than 62 per cent attract a duty of Rs 50 a tonne while those with higher ferrous content have a duty of Rs 300 a tonne.

The steel producers are demanding an increase in this duty to discourage iron ore exports. Iron ore is a critical input for the steel industry.

The country has been producing sufficient iron ore to meet the requirement of the domestic steel industry. India has been generating a surplus of 10-15 million tonnes every year in the recent past, according to a survey conducted by the Federation of Indian Mineral Industries (FIMI).

The current reserves of about 25 billion tonnes will last 75-85 years as steel production may touch 200 million tonnes by 2020.

Further, with more exploration, development of technology to treat lower ore grades and increased use of scrap, the country's iron ore resource could sustain the domestic steel industry for another 125-150 years, says the survey.

"The mining industry is considered supplementary to the steel industry worldwide. It is only in India that there is a dispute between the two. There is not a single producer of steel or sponge iron, who is starving of iron ore. We are ready to enter into long-term sale contracts with the domestic steel industry," said P K Mukherjee, managing director of Sesa Goa, the country's leading mining company.

"Iron ore exports for the year ending March 31 is estimated to be similar to or even lower than the last year's figure of around 93 million tonnes due to logistical bottlenecks," said Rahul N Baldota, president of FIMI.

The federation has also clarified that no blending of high grade iron ore with low grade is being done to escape a higher export duty. Blending of iron ore, as of any mineral, is part of the normal consumption process.

Meanwhile, the Indian Chamber of Commerce has suggested a ban on iron ore exports in a phased manner to conserve the resource for the country.

The continued export of iron ore from India is effectively reducing the competitive edge of domestic iron and steel plants, the Kolkata-based chamber said in a report released here on Friday.