| Date: |
08-10-2010 |
| Subject: |
Steel Min Sticks to 20% Tax Demand on Iron Ore Export |
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The steel ministry has reiterated its demand to levy as high as 20% tax on export of iron ore to ensure availability of the key raw material for domestic steel manufacturers first. The move if accepted by the government would dent the revenue stream of companies like Sesa Goa and state-controlled NMDC.
“The domestic steel industry is growing fast and requires more and more iron ore. We need to be more prudent with our natural resources. The industry must plan for future as it is poised to become major steel producer of the world,” steel minister Virbhadra Singh told FE.
Singh said that ideally there should be a complete ban on export of iron ore since with technological advancement even fines were being used for steel manufacturing. Of the country’s total iron ore export around 80% are fines which do not have much off-take within the country and could be hazardous for the environment if not exported. However, the steel minister said that this is not true anymore.
The government currently levies an export duty of 5% and 15% on iron-ore fines and lumps respectively. The iron-ore export from the country touched an all time high of 117.37 million tonne during 2009-10.
The steel minister argued that China imports iron ore in spite of having largest reserve of it in the world.
“The US which has the largest reserve of oil imports petroleum products from the Middle east and other countries,” the minister said. The country’s total steel production capacity is around 65 million tonne and it is expected to double in the next 3-4 years on the back of strong demand from real estate and infrastructure sectors.
Most of the steel producers in the country have planned to increase the capacity of their mills. State-owned Steel authority of India Ltd (SAIL) is in the process of nearly doubling its annual production capacity to 26 million tonne by 2014 requiring more iron ore.
Global steel majors such as ArcelorMittal and Posco have also announced to set up mega steel units in the country with an investment in excess of $20 billion.
Source : financialexpress.com
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