| Date: |
08-03-2011 |
| Subject: |
FIMI Writes To FM To Roll Back Export Duty Hike On Iron Ore |
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The Federation of Indian Mineral Industries today requested the Finance Ministry to roll back export duty hike on iron ore to enable the industry free from"suspended animation".
"We would be grateful if you consider sympathetically rolling back the increase in export duty to pre-Budget 2011-12 level,"FIMI Secretary General R K Sharma wrote in a letter to Finance Minister Pranab Mukherjee.
The hike in export duty would keep the domestic iron ore industry in a suspended animation in which illegal miners would reap benefits, he added.
The Centre raised export duty on fines four-fold to 20 per cent in the Budget 2011-12. The country had shipped over 100 million tonnes of iron ore in 2009-10 and 70-80 per cent of that was in the form of fines.
For lumps, the duty has been upped to 20 per cent from 15 per cent earlier.
"Such increases in export duty under pressure from steel body and the Ministry of Steel keep the iron ore industry on tenterhooks and do not allow to generate surplus to invest in exploration,"Sharma said.
Indian steel makers mostly use lumps and the requirement of fines do not exceed 30 million tonnes a year as two major firms, SAIL and Tata Steel, use fines produced from captive mines. The plants, which do not have own mines, procure fines from non-captive standalone mines, including NMDC.
The total demand for iron ore by the Indian steel industry is about 102 million tonnes against the domestic iron ore production, including stock-pile at the mine-heads, of 299 million tonnes, Sharma said.
Following announcement of the hike in export duty, the spot prices of Indian iron ore have plummeted to around USD 150 per tonne against USD 160-165 a tonne for 63 per cent FE prior to the Budget, he said.
The Railways has also raised freight on iron ore meant for exports by Rs 100 a tonne to Rs 1,600 a tonne with effect from March 1.
"The increase in export duty and railway freight have affected the iron ore industry very adversely,"Sharma wrote.
Source : indiareport.com
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