By: Ajoy K Das
26th August 2013
KOLKATA (Mining Weekly) - The Indian government was veering around for a cut in iron-ore export duties from 30% to 20%, with the country’s Finance Minister throwing his weight behind restarting stalled mining operations and exports.
The country’s highest-level economic policy-making body, the Cabinet Committee on Economic Affairs (CCEA), was scheduled to take up the issue of pruning the export duty this week and reconcile difference within the government with the Steel Ministry and large sections of the steel-making industry opposing any move to reduce the duty.
Clearly indicating his position on the debate within the government, Finance Minister P Chidambaram said last week that the country had to export iron-ore.
“We need to restart iron ore mining,” he said, showing it as series of initiatives to step up inflow of dollars and a panacea to the high current account deficit ailing macro-economic indicators.
Mining Weekly previously reported that the government would shortly be seeking Supreme Court views on restarting iron-ore mining in the Indian provinces of Karnataka and Goa, which the Court banned t following widespread illegal mining.
Meanwhile, in the debate on whether to reduce export tax or not, the Commerce Ministry in favor of a cut, pointed out in a note circulated within the CCEA that iron-ore pit head stocks had increased 62% to about 120-million tonnes during 2012/13 across the provinces of Orissa, Jharkhand and Karnataka, and added that boosting exports through cuts in taxes would in no way impact raw material availability to domestic steel producers.
The Commerce Ministry also pointed out that domestic steel production required calibrated lump ore and since bulk of the iron-ore production from mines were fines, higher exports and raw material security from domestic production had slender linkages.
However, a Steel Ministry official said that a high export duty on iron-ore export was necessary to conserve precious natural resource for long-term use of the domestic industry. This would also facilitate growth strategy for domestic production of finished steel of 300-million tonnes a year by 2025, which had been endorsed the national manufacturing committee headed by the Prime Minister.
But with the Finance Minister, a senior member of CCEA, backing a restart of mining and boosting exports indicated that the government’s priority was to increase foreign currency inflow to address current account deficit in view of its short-term urgency over long-term objectives of conservation of natural resources, another government official counter-pointed.
He said that it was also the opportune moment to boost iron ore exports through lower taxes considering that Indian export offers for iron ore fines (Fe content 63.5% and above) had rallied to levels of $137/ t and $138/t, last week riding on aggressive re-stocking by Chinese steel mills compared to export offers in range of $120/t and $122/t in early July and local miner-exporters should not miss the current bull run in international markets and exploit opportunities for higher dollar earnings for the country.
Edited by: Esmarie Swanepoel
26th August 2013
KOLKATA (Mining Weekly) - The Indian government was veering around for a cut in iron-ore export duties from 30% to 20%, with the country’s Finance Minister throwing his weight behind restarting stalled mining operations and exports.
The country’s highest-level economic policy-making body, the Cabinet Committee on Economic Affairs (CCEA), was scheduled to take up the issue of pruning the export duty this week and reconcile difference within the government with the Steel Ministry and large sections of the steel-making industry opposing any move to reduce the duty.
Clearly indicating his position on the debate within the government, Finance Minister P Chidambaram said last week that the country had to export iron-ore.
“We need to restart iron ore mining,” he said, showing it as series of initiatives to step up inflow of dollars and a panacea to the high current account deficit ailing macro-economic indicators.
Mining Weekly previously reported that the government would shortly be seeking Supreme Court views on restarting iron-ore mining in the Indian provinces of Karnataka and Goa, which the Court banned t following widespread illegal mining.
Meanwhile, in the debate on whether to reduce export tax or not, the Commerce Ministry in favor of a cut, pointed out in a note circulated within the CCEA that iron-ore pit head stocks had increased 62% to about 120-million tonnes during 2012/13 across the provinces of Orissa, Jharkhand and Karnataka, and added that boosting exports through cuts in taxes would in no way impact raw material availability to domestic steel producers.
The Commerce Ministry also pointed out that domestic steel production required calibrated lump ore and since bulk of the iron-ore production from mines were fines, higher exports and raw material security from domestic production had slender linkages.
However, a Steel Ministry official said that a high export duty on iron-ore export was necessary to conserve precious natural resource for long-term use of the domestic industry. This would also facilitate growth strategy for domestic production of finished steel of 300-million tonnes a year by 2025, which had been endorsed the national manufacturing committee headed by the Prime Minister.
But with the Finance Minister, a senior member of CCEA, backing a restart of mining and boosting exports indicated that the government’s priority was to increase foreign currency inflow to address current account deficit in view of its short-term urgency over long-term objectives of conservation of natural resources, another government official counter-pointed.
He said that it was also the opportune moment to boost iron ore exports through lower taxes considering that Indian export offers for iron ore fines (Fe content 63.5% and above) had rallied to levels of $137/ t and $138/t, last week riding on aggressive re-stocking by Chinese steel mills compared to export offers in range of $120/t and $122/t in early July and local miner-exporters should not miss the current bull run in international markets and exploit opportunities for higher dollar earnings for the country.
Edited by: Esmarie Swanepoel
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