KIOCL slams Assocham demand on imposing duty on pellet exports

NEW DELH: State-owned pellet manufacturer KIOCL today slammed industry body Assocham for proposing imposition of export duty on the value-added product of iron ore, terming the claim that it would improve availability as "baseless and incorrect".

"As the largest state-owned pellet manufacturer in the country, we strongly oppose any move to impose export duty on pellets. The claim made by Assocham that export duty would improve availability of pellets within the country is baseless and incorrect," KIOCL Chairman and Managing Director Malay Chatterjee told PTI.

Last week, Assocham wrote to Finance Minister P Chidambarm alleging that domestic iron ore producers were taking advantage of zero export duty on the key steel-making raw material and circumventing exports through pellets as there was hardly any value addition in conversion of iron ore fines to pellets.

While both fines and lumps varieties of iron ore currently attract 30 per cent export duty, there is nil duty on pellet exports.

"Very little pellet export has taken place subsequent to levy of Distance Based Charge (DBC) by railways on iron ore transported through railway network meant for manufacture and export of pellets. This levy has rendered pellets produced in India totally unviable in the international market," Chatterjee said countering Assocham claims.

India had exported 2.1 lakh tonnes of pellets during 2011-12 and did not make any exports during 2012-13. In fact, India imported pellets as the price of imported pellets were more attractive. India imported 8 lakh tonnes of pellets during 2011-12 and 14.7 lakh tonnes during 2012-13.

KIOCL, with a strong brand image in the international market and being an export oriented unit, also stopped export of pellets for more than two years.

Chatterjee said he would urge the Steel Ministry to take up the matter with its Finance counterpart so that pellet export is incentivised for earning foreign exchange at a time when rupee was getting devalued against dollar.