Kolkata | May 11, 2016: The ministry of railways has finally yielded to industry's demand and discontinued the dual freight policy for transportation of iron ore and iron ore pellets. This policy came into effect from Tuesday. The decision, that is likely to result in a boost in the movement of iron ore, was hailed not only by trade and industry but zonal railways as well.

Under the dual freight policy, transportation costs for iron ore or iron ore pellets meant for export were higher than that for loads meant for domestic use. This had resulted in a scam with several unscrupulous traders diverting stocks marked for the domestic market to ports for export. This was followed by a nationwide crackdown on illegal iron ore mining and movement of the mineral fell to a trickle.

"Iron ore production is on an upswing as many mines have started operating after a few years of suspension, following court orders. It has been forecast that India's iron ore production will be nearly 180 million tonne in 2016-2017. South Eastern Railway (SER) has already started showing results of this upswing. In April, 2016, SER loaded 7.18 million tonne of iron ore. This was an increase of 26.41% in over April, 2015. Iron ore loading for export was about 51 wagons per day. SER loaded 7.08 million tonne iron ore in April, 2016, for domestic use in comparison to 5.68 million tonne in April, 2015. The momentum of April is likely to continue in May, 2016," a senior SER official said.

While the domestic growth was satisfactory, officials were on the lookout for more export loading. Trade was also waiting for support from the government with a rise in international prices. While merchants are happy with the decision to discontinue dual freight rates, they also desire the total abolishing of export duty on iron ore. In the 2016-17 budget, export duty has been removed only for low grade lumps and fines of iron ore content below 58%.

(Source: http://timesofindia.indiatimes.com/)