Finance Ministry call on iron ore export duty soon

NEW DELHI: The Finance Ministry is likely to soon take a call on the demand for withdrawal of export duty on iron ore to encourage outbound shipments, sources said.

"A meeting on the issue is expected in the Finance Ministry soon. The Mines Ministry has also requested for the review of the duty," a source said.

There is 30 per cent export duty on iron ore and 5 per cent on pellets at present.

The Commerce Ministry is in favour of cutting the export duty on iron ore. Goa Chief Minister Manohar Parrikar too has recently demanded from the Centre withdrawal of the export duty on low grade iron ore.

The Pellet Manufacturers Association of India (PMAI) had strongly protested the duty which, they contend, would kill the pellet producing industry.

The Federation of Indian Mineral Industries (FIMI) had also requested the Centre to do away with export duty to help the sector.

Iron ore exports declined by 61.46 per cent to $ 52 million in August. India is the third largest global exporter of the ore.

The exports of iron ore, a key steel making raw material used to be about 100 MT, which declined to 62 MT in 2011-12, 18.37 MT in 2012-13 and finally 14.42 MT in the last fiscal on account of a number of factors including high duties and freight charges.

Domestic iron ore production has been on the wane and has declined to about 129 million tonnes in 2013-14 from 213.25 million tonnes six years ago.

Odisha is the largest producer of iron ore in the country. About 1.6 tonnes of iron ore is needed to produce a tonne of steel.

According to FIMI, about 62 MT of iron ore fines are lying unused at mine heads in the country.