Team Herald
PANJIM: In a major respite to the sagging iron ore mining industry in Goa, the Union Ministry has slashed the export duty on the low grade ore from 10 per cent to zero per cent. The decision will boost the export of nearly 4 million tons of e-auctioned ore, which is lying at the jetties, mining sites and ports since 2014, when the e-auction process was initiated in the State.
The zero export duty is expected to encourage the buyers for the final phase of e-auction, wherein total 7.76 million tonnes of stacked iron ore would be e-auctioned. While the Directorate of Mines and Geology (DMG) had identified ore for final phase of e-auction on February 8, the date for e-auction was not announced hoping for “good news” on the export duty in Union Budget, presented on Monday. The Government is expected to fetch good revenue from this e-auction.
“The slashing of export duty has given a major relief not only to mine owners but also to government as the State was losing out crores of rupee royalty on export,” a senior official from the Mines department said adding that ‘State can now highlight royalty from iron ore export in its upcoming budget’.
The Union Budget has proposed zero per cent export duty on iron fines below 58% Fe grade, from 10 per cent. On lumps below 58% Fe content the duty has been reduced to zero per cent from 30 per cent.
“In a highly competitive international iron ore market where the prices are depressed, this reduction will certainly help our members in marketing their ores. It may also help in encouraging buyers to bid during the next round of e-auction,” Goa Mineral Ore Exporters Association (GMOEA) secretary Glenn Kalavampara said.
In the first three e-auctions, held on February 17, March 4 and May 12, 2014 over 15 companies participated in the process. Thereafter, with fall in iron ore prices in the international market, the demand for ore also reduced during the successive 11 e-auctions held on August 19, November 6 and 7, 2014.In 2015, the e auctions were held on May 19, August 4, September 8, September 10, September 22, November 29 and December 24 last year.
While the falling international prices got poor response, the export duty- which was earlier at 30 per cent and later brought down to 10 per cent last year, saw limited export of the e-auctioned ore.
In last two years, DMG managed to e-auction only 7.24 million tonnes of ore, of which more than 60 per cent continue to remain at the sites. Hardly three million tonnes of ore has been either exported to China or transported for local consumption in states like Karnataka and Chhattisgarh. This included nearly 88,000 tons of Vedanta’s (Sesa Goa) ore.
“The heavy export duty had restricted certain buyers to transport the ore within the country. However, now it will help in export,” a official said. The Government meanwhile has already earned revenue of around Rs 910 crores through e-auction.
Reacting to the same, Goa Chamber of Commerce and Industry (GCCI) director general Ramakant Kamat said “Currently international prices for ore are at a all time low and with export duty and a lot of other fees and other charges imposed by the State Government, the industry was finding it difficult to carry on the mining activity”.
The GCCI wants State too to reduce the taxes and fees imposed by them, thereby helping in full-fledged resumption of the activity.
