FICCI seeks withdrawal of export duty on iron ore

September 13 The Federation of Indian Chamber of Commerce and Industry has written to the Union Finance Ministry seeking the withdrawal of export duty on iron ore with iron-content of less than 58 per cent.

The domestic steel industry generally consumes the high grade ores – iron content of 62 per cent and more – while the lower grade ore is exported primarily to China in the form of fines. Demand for export of low grade iron ore continues to be depressed with 12.83 million tonne (mt) being moved out of the country in FY22 as against 34.26 mt in FY21.

India imposed a 50 per cent duty on export of low grade iron ore (Fe content of 58 per cent and less) from May 22 onwards.

In a letter to the Revenue Secretary, on September 9, the industry body said, exports fell to 0.23 mt in June from 3.24 mt in the year-ago-period. With demand being hit post the duty coming into effect, stocks of about 145 mt are piled up at mine-head dumps.

Domestic consumption of iron ore was 171 mt in FY22, as against which the production was 204 mt. The average surplus in production over the last five years was 44 mt.

“As there is very negligible domestic demand for iron ore of less than 58 per cent Fe content, miners have no options but to export,” it said adding that “there is no or negligible domestic market” for these low-grade ores.

FICCI in its letter said: “In mining of iron-ore, only 25 -30 per cent are generated as lumps and balance ore is fines. Fines below 58 per cent Fe are required to be kept in captive mining lease area, as these cannot be utilised by steel industry or MSME sector. The non-removal of iron ore fines also restrict production of lumps while becoming an environmental hazard.”

The industry body suggested Centre may look at reviewing the duty regime “after low grade beneficiation capacity for iron-ore gets augmented domestically”.

Published on

September 13, 2022

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