Indian Railways has withdrawn the dual classification for transportation of iron ore and pellets

KOLKATA: Indian Railways has withdrawn the dual classification for transportation of iron ore and pellets. The new uniform classification 165 will be applicable both for domestic consumption and exports. It will meet a long standing demand of the domestic mining industry which has been grappling with higher transport charges making exports unviable.

The classification which will remain valid till March 31, 2017, came into effect earlier this month on May 10, 2016. The notification was issued through a circular issued by the Director Traffic (Commercial Rates) Railway Board, the top decision making body of the Railways. The decision is likely to bring some cheer to industry groups like Pellet Manufacturers' Association of India which have been raising the issue especially in the context of falling global commodity prices that have seen iron ore prices plunge in recent months.

For iron ore meant for exports, the Indian Railways has been charging Rs 300 per tonne over and above the freight rate for domestic transportation of the mineral. This in turn was making iron ore exports unviable, especially given the international low prices.