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:
Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.

  • Most Popular
  • Most Shared

Markets

REUTERS SHOWCASE

Political Pulse

Political Pulse

100 days of Modi: Good for business, not so good for marginalised groups.  Full Article 

Segway in India

Segway in India

Segway’s India business pegs hope on tech-savvy Modi  Full Article 

Best Economy

Best Economy

Swiss economy most competitive once again; EU, U.S., Japan improve.  Full Article 

Power Outage

Power Outage

Mumbai hit by power cuts  Full Article 

Commodities

Commodities

Gold imports, premiums to jump on festive demand - top refiner  Full Article 

Economic Worries

Economic Worries

Pakistan's promises to IMF in doubt as protests sap economy   Full Article 

Islamic Finance

Islamic Finance

Basel III deposit challenge looms over Islamic banks   Full Article 

Antitrust Probes

Antitrust Probes

U.S. business lobby says concerned China antitrust probes unfair.  Full Article 

Reuters India Mobile

Reuters India Mobile

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