Steel ministry still for duty hike on ore

The steel ministry is still gunning for a 20% export duty on iron ore.

“There is a general consensus that we should use maximum iron ore for our own value addition. A ban is not a measure that we have thought of. If it will happen, it will happen only through fiscal measures,” steel secretary Atul Chaturvedi said.

Though the ministry had sought a duty of 20% on iron ore lumps and fines going out of the country, but the finance ministry enforced only a 5% duty in December last year.

Currently, iron ore lumps attract a duty of 10% from 5% earlier, while iron ore fines attract a duty of 5%, up from nil till December.
Chaturvedi said the method to slow down iron ore exports hasn’t been finalised yet. “There are issues on both sides (steel companies and iron ore exporters).”

“We are exporting away our future. That ore will come back to us in the form of steel in future, because we will not be able to produce it here,” J J Irani, director, Tata Steel, had said.
On their part, iron ore exporters are predictably unhappy with the government imposing duty on exports.

“We export mostly fines, which are not used by Indian steelmakers… They are wasted here and the Chinese have the technology to use fines in their steelmaking process. So, why shouldn’t we be allowed to export material that is not used in India?” asked SBS Chauhan, advisor, Federation of Indian Mineral Industries (Fimi).

“Fines are not used in India as of now, but there will be increased use of fines now as new plants, which are coming up are all based on sinter or pellet plants. So we will see more use of iron ore fines,” Chaturvedi said.

“It (iron ore export tax) is a slightly complicated issue. If you don’t get iron ore lumps you have a problem; if you take lumps, you get fines also; and if you don’t dispose of fines, then you have an environmental problem. I think this is interrelated and we have to find a balance,” said Chaturvedi.

According to data available with Fimi, of the total iron ore production of 215.44 million tonne in 2008-09, 140-150 million tonne was fines.