India For More Iron Ore Export Curbs, Duty Rise Seen.

NEW DELHI/MUMBAI: India's steel minister called for curbs on exports of iron ore on Friday, as the federal government heads into a budget that could raise export duty on the steel-making ingredient marginally.

"Yes, I am in favour of it. There should be more control on (iron ore) exports," Steel Minister Beni Prasad Verma said on Friday.

India's government is unlikely to approve a blanket export ban as it would prefer better regulation and incentives for increased domestic use of the steel-making resource, as demand in the world's second-fastest growing major economy rises.

In April last year, India raised the export duty on iron ore lumps to 15 per cent from 10 per cent previously. Duty on iron ore fines stood at 5 per cent.

The ministry of railways hiked the transportation cost 50 per cent to 1,500 rupees per tonne on Jan. 27, but kept it unchanged in Friday's Railway Budget. The government presents its budget for 2011/12 on Monday.

"There could be a marginal hike in export duty (of iron ore)," said Vasant Poddar , vice-president at the Federation of Indian Mineral Industries ( FIMI )), a trade body. "These curbs on iron ore exports are not warranted as nobody in the world, be it Europe, Japan, South Korea and U.S. consumes our low grade iron ore, other than China," he added.

Supplies of the steel-making ingredient from India have been limited by a ban of shipments from the southern state of Karnataka, which is currently being appealed by exporters in the Supreme Court.

Exports fell for the sixth straight month in December 2010 as the Karnataka state ban continued to bite. Exports were down 24.8 per cent year on year and fell 17.02 per cent in the April to December period.

Iron ore prices have risen around 13 per cent this year, adding to gains of more than 40 per cent in 2010.

Source : economictimes.indiatimes.com