Govt should roll back export duty on low-grade iron ore; more price cuts unlikely: NMDC’s MD Sumit Deb

National Mineral Development Corporation is the country’s largest iron ore miner.

The managing director of National Mineral Development Corporation (NMDC), the country’s largest iron ore miner, on August 3 urged the government to completely withdraw the 50 percent export duty on low-grade iron ore or fines (less than 58 percent Fe content), imposed with effect from May 22, 2022.

Speaking to Moneycontrol on the sidelines of India’s Coal Outlook 2022 conference organised by Coal Mint, Sumit Deb, state-owned miner NMDC’s managing director, said, “Just how it has been in the past, we expect the export duty on grade iron ore with less than 58 percent Fe content - which is relatively less consumed within the country--- to be rolled back even as the export duty on the one above 58 percent Fe content continues."

In a mine, ores of different grades are produced, whereas the steel industry procures only high-grade ore of plus 58 percent Fe. The low-grade gets accumulated and if not sold or removed, it will occupy space which will affect mining operations, Deb added.

The Indian government announced steep tariffs on eight steel items as well as iron ore and pellets on May 21, 2022, to curb inflation. Apart from a variety of steel and steel products, the government has increased the export duty on 58 percent and above Fe grade iron ore fines and lumps from 30 percent to 50 percent.

On Pricing Front

There seems to be some respite coming in for the prices of key raw materials used in the steel-making industry- iron ore. The prices of iron ore have been in a free fall since the month of January and NMDC itself has slashed the rates three times since the imposition of export duty, but the trend seems to be reversing.

Deb said, “I don’t see further cuts taking place for the iron ore industry and would like to see stability. But the cuts over the past few months have been warranted for bringing down steel prices. But now with international prices trending lower, we don’t see the scope of further cuts.”

Notably, Odisha Iron Ore Fines Index, a benchmark index for iron ore prices across the industry, inched up by Rs 100 a tonne for the last week of July, suggesting PSU miners too could be following suit soon.