Union Budget 2011 impact on metals & mining sector: Angel Broking

Export duty on export of iron ore has been raised to ad valorem 20% on lumps as well as fines. Currently, lumps are taxed at 15% and fines are taxed at 5%. This is negative news for iron ore exporters such as Sesa Goa (~90% of total sales from exports) and NMDC (~15% of total sales from iron ore exports). Nevertheless, no imposition of mining tax (26% at PBT) is a positive for mining companies as well as steel companies with captive mines.