Mines ministry seeks cut in iron ore export duty

NEW DELHI Wed Jul 31, 2013 4:49pm IST

An excavator operator waits for trucks to be loaded with iron ore at the Bedara Bhommanahalli (BBH) iron ore mines at Chitradurga in the southern Indian state of Karnataka November 9, 2012. REUTERS/Danish Siddiqui

An excavator operator waits for trucks to be loaded with iron ore at the Bedara Bhommanahalli (BBH) iron ore mines at Chitradurga in the southern Indian state of Karnataka November 9, 2012.

Credit: Reuters/Danish Siddiqui

Related Topics

NEW DELHI (Reuters) - India's mines ministry is seeking a cut in the iron ore export duty after a sharp fall in overseas shipments, days after the prime minister spoke about increasing exports to tame the country's current account deficit.

India was once the third-largest exporter of the steelmaking raw material, but shipments plunged more than 80 percent in three years to hit 18 million tonnes last fiscal year. The lower exports have helped cushion global iron ore prices.

"I have written to the finance and commerce ministries to consider a cut in the duty, at least on low-grade fines," mines minister Dinsha Patel said on Wednesday on the sidelines of a conference, declining to give the duty he had suggested.

Lower production due to a clamp down in illegal mining, an export tax of 30 percent and higher railway freight rates are the main reasons for the slump, according to H.C. Daga, president of the Federation of Indian Mineral Industries (FIMI).

"With the withdrawal of about 100 million tonnes (of Indian iron ore) from the world market, iron ore prices that were in a declining trend suddenly firmed up, benefiting (foreign) private companies at the cost of India and its exporters," Daga said.

Prime Minister Manmohan Singh said earlier this month that the government was trying to remove "constraints in the export of iron and other ores".

Government officials declined to say what steps the prime minister was referring to, but Daga said he expected a cut in the export duty soon as a result of hectic lobbying by FIMI with government departments.

GOA MINES

Patel said his ministry would make all possible efforts to resolve problems related to the iron ore industry in Goa, India's top iron ore exporting state, where mining has been banned since last year following allegations of irregularities.

"I am convinced that the problem of Goa will be resolved soon," Patel said.

Goa expects court approval to resume by year-end the production and export of iron ore from mines with a capacity of about 40 million tonnes as it has taken steps to rectify problems that led to the ban, a state bureaucrat told Reuters in May.

The state exports all of its iron ore to China.

(Additional reporting by Siddesh Mayenkar in Mumbai; Editing by Tom Hogue)

FILED UNDER:

Religion and Politics

REUTERS SHOWCASE

Fund Raising

Fund Raising

Flipkart raises $700 million in fresh funding.   Full Article 

Reforms Push

Reforms Push

Modi may order insurance, coal reforms if vote delayed - officials.  Full Article 

Reuters Exclusive

Reuters Exclusive

India looks to sway Americans with nuclear power insurance plan  Full Article 

To Boost Growth

To Boost Growth

Crank up public spending to revive growth - chief economic adviser.   Full Article 

Bold Steps

Bold Steps

SpiceJet rescue plan marks bold bet on Indian aviation recovery.   Full Article 

New Airline

New Airline

Tata, Singapore Air venture Vistara to take off on Jan 9.  Full Article 

Online Sales

Online Sales

Knock knock. Who's there? Amazon's best-selling holiday author.  Full Article 

Hacking Attack

Hacking Attack

N.Korea says did not hack Sony, wants joint probe with U.S.  Full Article 

Reuters Poll

Reuters Poll

BSE Sensex to hit 32,980 by December 2015  Full Article 

Reuters India Mobile

Reuters India Mobile

Get the latest news on the go. Visit Reuters India on your mobile device  Full Coverage