PANAJI | Feb 11, 2016: Ahead of Budget, Goa’s mining industry said that it expects 10 per cent export duty to be scrapped. The industry is also looking for permission to dump outside the lease area through changes in MMDR Act from the Budget. “We are hopeful of favorable news on export duty as both the ministries as well as the chief minister have recently recommended it to the government. The mines ministry as well as the commerce ministry is in favor of scrapping the duty and announcement of duty removal could be pre-Budget, is the optimistic view of industry. With international price of low-grade ore with Fe content of 56 per cent nose diving to US $ 23 per ton, the scenario for mining is rock bottom if the duty continues,” according to industry. After paying 10 per cent towards the Goa Permanent Fund and 10 per cent export duty we will be left with only US $ 18 per ton which is totally unviable, said a mining source. From the state government, mining companies are looking at local levies to go. Royalty of 15 per cent and contribution of five per cent to the District Mineral Fund were during better market conditions and need to be lifted, according to industry.
In January 2016 the mineral ore exporters association GMOEA had approached the prime minister’s office seeking removal of export duty saying it will help in higher revenues of $750 million a year. GMOEA had written to the Prime Minister’s Office urging it to remove the 10 per cent duty on iron ore fines with Fe content below 58 per cent and the 30 per cent export duty on iron ore lumps irrespective of grade.
GMOEA pointed out that Goa mainly produces low grade iron ore (with iron content between 55-58 per cent), which is not consumed by local firms but exported to countries such as China and Japan. After international price of low grade ore have gone into free fall it is not viable for miners to extract the ore with the current tax mechanism, GMOEA said. “The industry has to contend with extremely high percentage of taxes to the tune of 40 per cent even for low grade of iron ore, which makes the industry uncompetitive,” it said.
Sources said that international outlook for iron ore continues to look bad with major global suppliers in Australia and Brazil flooding the market and capable of lowering price further.
(Source: http://www.navhindtimes.in/)