wants low grade ore to be exempted from hike
PANJIM, FEB 28
Goa Mineral Ore Exporters Association (GMOEA) Secretary Glenn Kalavampara has claimed that the high export duty of 20% on iron ores from the Central Government would severely affect the economy of Goa.
He has urged that low grade ores, prevalent in the State, should be exempt from the current increase in export duty.
“The Central budget announced on Monday leaves Mining Industry from Goa groping for hope to correct a flat increase of 20% on Fines and Lumps Iron Ore indicated by the minister of finance,” Kalavampara said.
“A flat increase of 20% across iron ore fines and lumps is the highest levy that has ever been imposed by the Ministry. The Ministry of Steel in the past have been pressing for this increase.”
“Currently, the prevailing duty applicable for Iron fines was 5% and Iron ore Lumps was 15% ad valorem. Although duty was applied in the past for iron ore fines, it was the view of the Industry that surplus fines which have no other domestic requirements were the ones which were exported from India.”
Kalavampara stated that in the case of Goa, 100% of iron ore do not have any domestic requirement and hence export is the only option.
“Further nearly 90% of Goan ores are Fines and low grades below 62%. Only from the state of Goa, exports of ores as low as 50% were being exported due to a limited demand for such low grade ores,” he said.
“Value addition of Goan Iron ores to pellets also does not have much promise as the raw material itself create limitations,” Kalavampara added.
He claimed that in the present budget, by imposing a flat increase of 20% across the board, an increase of 300% from the existing level, it would result in making the low grade iron ore exporters crippling and would have a large dent felt on ancillary activities immediately.
“A large amount of activities would be rendered unviable due to limited offtake, thereby creating an negative impact at ground levels. Some mining companies have indicated drastic reductions in their volumes,” he said.
“It may be noted that decrease in exports due to such forceful measure would result in lower taxes for the state Government as royalties and other incomes generated by the State Government from the Mining industry would reduce.”
Kalavampara pointed out that Goan ores have a lower Iron Grade as compared to the rest of the iron ores from India.
“With this high export duty @ 20% on Iron ores from the Central Government, the economy of Goa would be severely affected as the receipts of income to the state government alone was by the Mining industry from Goa,” he said.
“In the FY 2010-11, incomes from Mining industry would have crossed 900 crores by way of Royalties and other state Government taxes alone, which would decrease in the next year if this anomaly of a high export duty is not corrected soon by the Centre.”
“It may be noted that the Foreign exchange earned by the Mining industry of Goa is over Rs 10000 crores apart from generating a large employment in rural Goa.”
“The Mining industry strongly urges the Government to reconsider its present proposal and hopes for a favorable response to low grade iron ores below 62% which have no demand from any steel sector in the country. As such low grade ores ores should have been exempt from the current increase in export duty,” Kalavampara added.
