Shweta Kamat
PANJIM: The Union Government’s refusal – being projected as reluctance, to soften the blow – in slashing the export duty on ore has come as a major setback to the iron ore mining industry in the State that had been relying on this to begin operations in Goa. The export duty has been hiked is a bid to ‘discourage’ the ‘export’ of ore to China and other foreign countries and is part of Prime Minister Narendra Modi’s “Make in India” concept.
Speaking to Herald, Chief Minister Laxmikant Parsekar said that during a recent meeting with Union Finance Minister Arun Jaitley, he learnt that the export duty of 30 per cent is being levied to encourage the local steel industry to purchase domestic ore.“The Union government is clear that it won’t slash the export duty on ore. But in the case of Goa they might consider a marginal relaxation. The exercise is basically aimed at discouraging iron ore export to China and other foreign countries,” the Chief Minister said.
However, it is reliably learnt, from high-level sources in the Union Ministry of Mines that the Prime Minister has tersely communicated to the Goa Chief Minister through back channels, not to return with a request to slash export duty of ore, because Goan ore exporters cannot be given preferential treatment. The Goa CM is now struggling to administer this bitter pill to powerful mine owners who have paid massive amounts of stamp duty for the extension of their mining leases.
Parsekar, who holds the Mining portfolio, said that the Centre’s stand is a part of Modi’s ‘Make in India’ campaign. “There are many steel producers in the country who import ore from China and other countries. This import needs to be stopped,” he said.
Asked whether Goan ore, which is largely of a low grade, will find a domestic market, the chief minister answered saying “definitely”. “If not in Goa, there are buyers in other parts of the country,” he added.
Goa produces iron ore with 55 to 58 Fe (ferrous content) and the State had been exporting this low grade ore to China until September 2012, when operations came to a halt following suspension of mining activities.
The news has come as a major shock to the industry, which had earlier said that such a high export duty and with no domestic market for the low grade ore it would be economically unfeasible to resume mining operations from October this year.
Goa Mineral Ore Exporters’ Association (GMOEA) secretary Glen Kalavampara said, “I don’t think industry will resume in October this year, if fiscal corrections are not done and if no market is made available.”
“It is unlikely that domestic buyers from states like Orissa and Karnataka will purchase low grade ore from Goa, when they themselves produce ore. Also their industries are largely dependent on high grade ore,” he said.
“There is no domestic market for 58 Fe grade ore in India,” Kalavampara said, adding “at the end it all depends on the government, whether they want mining to resume or not.”
On the other hand, small producers who have been into domestic sale of ore have welcomed the move. Mine owner Harish Melvani said, “The Central government’s decision is basically to encourage domestic consumption. We have been importing ore for our domestic units for ages.”
