GCCI Objects to Hike in Iron Ore Export Duty.

Goa Chamber of Commerce and Industry (GCCI) today said that hike in the export duty for Iron ore will make low grade ore exports from the coastal state totally unviable.

"The export duty will make export of Goan low grade ore totally unviable which will have a cascading effect on the Goan economy," GCCI Chairman Manguirish Pai Raikar said.

GCCI, in a letter to Union Finance Minister Pranab Mukherjee has demanded that the export duty be hiked only on the high grade ore, sparing the low grade ones.

Union government has hiked the export duty from 20 per cent to 30 per cent through a notification on December 30, 2010, leaving Iron ore mining industry fuming.

"Kindly amend the notification and restrict the export duty only to the high grade ore with Fe content above 58 per cent and withdraw the duty on other lower grade ore," Raikar has urged.

GCCI has said that Iron ore exports account for nearly 85 and 95 per cent of total exports of both the Mormugao Port and Panaji Port respectively and both will lose substantial revenues of about 150 crores per annum, if exports are stopped.

"Most of the recent investment made in infrastructure (both Government and private) to cope with increased export market demand will become unviable and would lead to higher production cost of exportable grades, which could make these increasingly unviable through the cost spiral effect," the GCCI said.

Raikar said that an estimated 30,000 people comprising mine workers, barge workers, machine operators , truck drivers, mechanics, labourers etc. Depend directly on the mining activity for their livelihood which will be threatened if the exports cease.

"Loss of business for people involved in mining related activities like barge owners, launch owners, shipping agents, stevedores, road transport contractors, ports, etc. Will again adversely impacting the Central and State revenues," the GCCI said.

"Already faced with a budget deficit, the state government will not be able to sustain the economical and social fallout," the GCCI added.

Source : news.outlookindia.com