Manufacturers seek cut in iron ore royalties, logistic cost

The logistic cost and royalties on iron ore should be brought down in order to make domestic steel industry more competitive, Chhattisgarh Sponge Iron Manufacturers Association said. The domestic steel industry is facing a tough situation due to cheap imports from countries such as China, Japan, South Korea and Russia, among others. "Royalty on iron ore should be reduced to Rs 100 per tonne," Chhattisgarh Sponge Iron Manufacturers Association (CSIMA) General Secretary Vijay Jhanwar said. He said at present the cost of royalty and other taxes being levied on iron ore by the state government is around Rs 450 per tonne. Asserting that the railway logistic cost has to be brought down to the level of 2003-04, he said, "Railways logistic cost is Rs 2 per tonne per km which needs to be brought down to Rs 1.25 per tonne per km." Jhanwar also said that the maximum sale price of iron ore lumps should be "freezed at Rs 1,000 per tonne on ex mine basis." He also said "all the existing steel companies should be given coal linkages immediately through allotment and not through auctions." The proposal for policy on supply of coal to unregulated sectors like steel and cement is yet to seek Cabinet's approval. Jhanwar further said that long steel products should be given protection from imports by increasing import duty "and a levy of anti dumping duty and a minimum floor price for imports." "If (this is) considered the steel industry can revive and compete with cheap imports and also this will help in keeping the steel prices competitive in India . This will also help banks in recovering a considerable amount of their Loans which have become NPA's (non performing asset)," he said.