New Delhi | Feb 29, 2016: The government on Monday proposed to remove the export duty on low grade iron ore fines and lumps in a bid to make the domestic mining sector, particularly in Goa, competitive amid a fall in prices globally.
"Export duty on iron ore fines with Fe content below 58% has been proposed to be reduced from 10% to nil while export duty on iron ore lumps with Fe content below 58% will be brought down to nil from 30%," Finance Minister Arun Jaitley said while unveiling the Budget 2016-17 in the Lok Sabha on Monday.
The government has been considering reducing export duty on iron ore as it wants to help revive the mining industry, which is facing tough times due to softening of global commodity market. Prices of the ore globally have plummeted to a decade low and there are few takers for the Indian iron ore.
The intention is to help the industry stay competitive as globally prices of iron ore have on an average declined 40% and in the case of lower grades (below 58%) have plummeted to a decade low, they added.
There is a 30% export duty on iron ore fines with Fe content of 58% and above and 10% for below this content. For iron ore lumps, the duty is a flat 30%. Current price for iron ore is around USD 39-40 a tonne, excluding royalty, cesses and transport costs. By reducing the export duty to 10%, there is a good chance to find some takers for the ore.
This will also help in liquidating stocks ahead of the increase in production in coming months. A senior government official said: "Last month, the government reduced export duty on iron ore pellets to zero from 5% to make the commodity more competitive amid subdued demand and weakening prices."
Similarly, for iron ore lumps and fines, the cut in export duty will help producers cut their losses. Also, the export duty on iron ore shipped by state-run NMDC has been slashed to make it more competitive and a similar step can be taken for other exporters, he added.
(Source: http://www.dnaindia.com/)