New Delhi | Feb 04, 2015: The government is likely to lower the export duty on low-grade iron ore in Budget 2015-16 to help the revival of the mining industry, primarily in Goa and other states.

Finance minister Arun Jaitley will soon chair a meeting of the top brass of finance and mines ministries to explore the possibility of lowering the export duty on iron ore fines, which mines minister Narendra Singh Tomar has argued is crucial to revive mining. Defence minister Manohar Parrikar, in his earlier stint as chief minister of Goa, had pitched for resumption of “meaningful” mining activities in his state by demanding facilitation of ore exports.

Tomar is learnt to have endorsed Parrikar’s view and suggested to Jaitley that export duty on inferior grade iron ore should be brought down to a reasonable level to help resumption of mining activities.

While iron prices have declined globally making its exports more difficult, the existing 30 per cent export duty (levied in 2012), has compounded the plight of miners and needs to be rationalised, a top mines ministry official told The Indian Express.

As per the blueprint being firmed up for slashing the export duty, there would be no export duty for iron ore having up to 50 per cent ferrous (Fe) content, 10 per cent duty for ore between 52-58 per cent Fe grade, 20 per cent for 58-62 per cent Fe grade and flat 30 per cent for above 62 Fe grade.

Justifying the move, the official said iron ore from states having low ferrous content are usually discarded by leading domestic steel manufacturers. The ferrous content ranging between 42-58 per cent which is described as “sub-grade” having no domestic demand, has resulted in tonnes of them lying as dumps at the pitheads across Goa.

The government had banned mining activities in Goa in 2012 following allegations of huge irregularities. The Supreme Court partially lifted the ban in April 2014 with a cap of 20 million tonne on output. Late last month the state government lifted the ban, but a spectre of weak export earnings from mining is bothering it.

Global iron ore benchmark prices has slid to around Rs 3,780 a tonne to a five year low due to decreasing demand from China, which is the world’s biggest consumer of the mineral. The government has promulgated an ordinance to amend the Mines and Minerals Act to facilitate auctioning of iron ore mines.

(Source: http://indianexpress.com/)