Budget Expectations: Miners seek export levy, rail freight rationalisation.

The harried iron ore industry, which has been hit by Supreme Court clampdown following rampant illegal mining, hopes to get some respite in the form of duty rationalisation in exports along with freight charges in the upcoming Budget, industry players have said. "We hope the Government will reduce export levy on iron ore fines to push exports.

Also, some kind of duty rationalisation should be done in rail freight charges to give a boost to this industry," Federation of Indian Mineral Industries (Fimi) Southern Region Chairman Basant Poddar told PTI from Bangalore. Currently, while Railway freight charge for domestic iron ore movement stands at around Rs 900 per tonne, it is around Rs 2,800 for commodities meant for exports.

"As there is a large discrepancy in the charges, we want them to be rationalised in the upcoming budgets (Railway and general)," Poddar said. He said levy on iron ore fines should be reduced to encourage exports. Another official from a Karnataka-based mining firm echoed similar views. "In FY12, exports of iron ore have already been down significantly.

As per our estimates, it will be down by around 55 per cent in the current fiscal," said the official, who wished not to be named. India produces around 200 million tonne iron ore per year, 60-65 per cent of which are exported, mostly to China.

In FY11, exports stood at 110 million tonne. Most of the iron ore exported from the country are lower grade fines which are mainly produced from Goa, Odisha, and Karnataka, among others. Referring to illegal mining and subsequent closure of mines in major producing states, the official said while illegal mining should be curbed, the sector as a whole should not suffer due to activities of a few players.

Source : moneycontrol.com