Team Herald
PANJIM: The decision by the Finance Minister Arun Jaitley to slash export duty on low grade iron ore produced in the state from 30 to 10 percent has evoked a mixed response from those contacted.
The new duty rate applicable to the ore with less than 58 per cent iron content will be effective from June 1.
In a statement released to the press, the CEO, Iron Ore Business, Vedanta Limited, Kishor Kumar said “We welcome the decision to reduce the export duty on low grade iron ore produced in Goa and thank the Minister of Finance Arun Jaitley, Defence Minister Manohar Parrikar, Goa Chief Minister Mr Laxmikant Parsekar and other stake holders for understanding the plights of the industry to reduce the export duty to make the business viable.”
He said the reduction in the export duty was a shot in the arm for the Goan iron ore industry that produces mostly low grade iron ore. As steel makers in India can use a very small quantity of Goa’s low grade iron ore, most of the Goan produce will have to be exported.
“It is in the interest of one lakh mining dependent families who were rendered jobless for nearly three years,” said Kishore Kumar.
He further stated that now another major hurdle before Goa was that of the mining industry dumping outside the lease areas. Mining leases in Goa are small and completely mineralised and have used mostly non forest land outside the lease for dumping with permission from State Government and Indian Bureau of Mines. Such dumping is provided for in the rules and needs to be expressly provided for in the Act for operations to restart.
“We hope the that Ministry of Mines will soon come up with much needed amendment in Act in the interest of Goan mining industry,” added Kishor Kumar.
The secretary of the Goa Mineral Ore Exporters Association, Glen Kalavampara said they welcomed the reduction in the export duty for 58% iron ore content and it would help the state generate additional revenues from ores to be e auctioned. Liquidating it would reduce inventory space once regular mining would commence. International prices had fallen sharply since a year ago and hence made it necessary that be on some level playing field. He however maintained that although not entirely gone the difference was now reduced but would still need some corrections to ensure efficiencies in operation and logistics. Goan ores he said had very limited options in the market and this reduction was most welcome.
However like everything in life and in Goa there is also the flip side. Harish Melwani who operates a mine in Goa said “This reduction of the export duty to 10% is a toothless declaration because Goa does not export from June to October. Moreover mainly it is 50% to 54% which is exported which with the reduction is a loss making proposition due to the low international prices. What needs to be done is expedite the GSPCB consent to operate the beneficiation plants so our grade can be improved and supplied to Indian Steel Plants which is today resorting to the imports of iron ore”.
He went on to say that he would not commence operations given that he would end up losing money in such an operation under these conditions.
Another senior executive of one of the largest companies in the industry who did not want to be on record said the reduction was welcome and with this 50% of the companies in the sector would now be able to make a profit. He claimed that mining would commence in a month or two at the latest and that export would begin by September or October latest.
Asked if it was possible commence operations in such a short span of time he said that the barges were not a problem. Rather it would be the trucks that would cause major issue. The industry he said needed trucks that could transport 30 tonnes in one journey rather than the ones at present. Now the industry had 6000 truck carrying 10 tonnes but had 12000 trucks waiting on the side. Some believe the number to be as high as 21,000. The decision he said to create special road corridors was very good and this would mean that given the right conditions and the trucks could carry ore for a longer period of time and perhaps sometime in the future even be operating 24x 7. Sweet dreams are made of these. Time will tell us if it becomes a reality.
