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Journalism of Courage
With mineral-rich states mounting pressure on the government to restrict export of iron ore and incentivise value-addition,the mines ministry has written to the finance ministry seeking abolition of the 15 per cent export duty on iron ore pellets.
According to the mines ministry,increasing the value-addition of fines into pellets needs to be strongly incentivised. It further added that export duty wasnt enough to promote value-addition besides eroding the market of Indian pellets overseas.
The country was currently producing 215 million tonne of iron ore,much in excess of the annual domestic requirement,which is currently pegged at 88 MT. Of the total production,generation of iron ore fines stood at 126 MT (nearly 57 per cent) of which only 40 per cent find their way to the blast furnaces of the local steel producers and the remaining fines are exported by the miners,the ministry said.
In a letter to the finance ministry on January 12,the ministry contended that the export duty was directly impacting the competitiveness of domestically produced pellets in the international markets since the cost of energy was costlier in the country.
Mines ministry is of the opinion that in order to promote value-addition in the country,especially of the excess ore produced,the export duty on pellets should be removed. Accordingly the finance ministry may like to reconsider the levy of export duty on pellets in the larger interest at the earliest, the ministry said in its letter.
The government had introduced an export duty of Rs 300 per wet metric tonne on export of pellets. Subsequently it was upwardly revised to 15 per cent on ad valorem basis and then lowered to 5 per cent and thereafter hiked to 10 per cent. Currently the export duty on pellets stood at 15 per cent with effect from April 29,last year.
There is also an immediate market for Indian pellets abroad and the country would be able to gain largely through its exports more so as they replace fines as a value-added product, the ministry said.
Most of the mineral-rich states like Chhattisgarh,Jharkhand and Orissa have been stiffly opposing ore exports and are insisting on value addition which would help in generating employment.
