Mines ministry wants 10% export duty on Goan iron ore to go

Last month, Goa's mining industry body GMOEA wrote to the Prime Minister's Office, seeking to remove 10 percent export duty on iron ore fines with Fe content below 58 percent and 30 percent export duty on iron ore lumps irrespective of the grade.
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Feb 17, 2016, 08.05 PM | Source: PTI

Mines ministry wants 10% export duty on Goan iron ore to go

Last month, Goa's mining industry body GMOEA wrote to the Prime Minister's Office, seeking to remove 10 percent export duty on iron ore fines with Fe content below 58 percent and 30 percent export duty on iron ore lumps irrespective of the grade.

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Mines ministry wants 10% export duty on Goan iron ore to go

Last month, Goa's mining industry body GMOEA wrote to the Prime Minister's Office, seeking to remove 10 percent export duty on iron ore fines with Fe content below 58 percent and 30 percent export duty on iron ore lumps irrespective of the grade.

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The mines ministry has written to the finance ministry for scrapping of 10 percent export duty on iron ore with Fe content below 58 percent, a move that is designed to make the mining industry in Goa more competitive.

Besides, it has also requested the finance ministry to consider raising the import duty on aluminium products by 2.5 percent to 7.5 percent and not raise the same on aluminium scrap.

"We have recommended to the finance ministry scrapping 10 percent duty on iron ore exported from Goa. We will recommend a reduction in export duty on high-grade iron ore (Fe content over 58 percent). Quantum will be decided in a day or two," Mines Secretary Balvinder Kumar told reporters here.

Last month, Goa's mining industry body GMOEA wrote to the Prime Minister's Office, seeking to remove 10 percent export duty on iron ore fines with Fe content below 58 percent and 30 percent export duty on iron ore lumps irrespective of the grade.

The industry body argued that prices of iron ore with Fe content of 56 percent have nosedived from USD 119 per tonne free on board (FOB) Goa in January 2011 to USD 21 a tonne in November 2015, making it unviable for miners to extract the ore with the current tax mechanism.

The industry has to contend with extremely high percentage of taxes to the tune of 40 percent even for low grade of iron ore, which makes it uncompetitive, it had said.

The secretary added that the ministry has already written to the finance ministry to consider a 2.5 percent import duty hike on primary aluminium products and bring it to 7.5 percent.

"Besides, we have recommended that the import duty on in-bound shipments of aluminium scrap should not be increased," he added.

He said industry body Aluminum Association of India has mooted a case for safeguard duty on aluminium and the mines ministry has asked the finance ministry to expedite the case.

Asked on minimum import price (MIP) on aluminium, Kumar said: "(We) have not sent any formal request on MIP for aluminium. We have asked the aluminium industry to present a case and then, we will decide based on its merits." The ministry has not recommended any change in the duty structure on copper ore or primary copper catalyst or cathode.

The domestic aluminium industry says it's facing "a very tough time" on account of the twin problems of cheap imports from China and a meltdown in global prices.

The price of aluminium at the London Metal Exchange (LME) has fallen 37 percent to USD 1,555 per tonne in November this year, from USD 2,477 a tonne in the year-ago period.

It has been lobbying with the government to hike import duty or impose safeguard duty on aluminium products.

Industry leaders had also met Finance Minister Arun Jaitley last year and requested him to raise import duty on the metal to check cheap imports from China, a scenario that can impact investments worth Rs 1.2 lakh crore.

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