The Hindu Business Line : Goa's iron ore exporters demand duty rollback

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Panaji Mar. 2 Reeling under the adverse impact of a steep export duty slapped on iron ore exports in the Union Budget 2007-08, which came into effect from Thursday, Goa's iron ore export industry has demanded that the duty be rolled-back to save the industry from closure.

Goa's exporters plan to meet the Union Finance Minister, Mr P. Chidambaram, next week in New Delhi "to sort out the issue," stated Mr S. Sridhar, Executive Director, Goa Mineral Ore Exporters' Association (GMOEA), body representing iron ore exporters in the State. Five China-bound export vessels were cancelled on Thursday as an immediate fallout of a whopping export duty of Rs 300 per tonne, he said.

`Adverse impact'

"We are already facing the adverse impact of the Union Budget. Five China-bound vessels involving over 3 lakh tonne of ore stand cancelled on the very first day," he said. "While around 23 vessels, which are already in Mormugao and Panaji port would set sail with ore, the industry has decided nobody will accept fresh nominations till the duty matter is sorted out," Mr Sridhar declared.

"We have already petitioned the State Government about the crisis faced by the industry and consequently the disastrous consequences it would invite for the State economy," stated Mr Sridhar and reiterated, "If the duty is not rolled back, the industry will have to close down."

The industry sources opine that the steep duty is coming at a wrong time when low grade Goan iron ore is competing with low-grade ore from Australia and Brazil.

Stiff competition

"The low grade ore is also not utilised by the domestic steel industry unless it is blended with high grade ore," says Mr Sridhar.

"The importing countries too, blend Goan ores with high grade ores from Australia and Brazil. It is only through these means and proximity to the coast that Goa is still a viable source for iron ore," he remarked.

Speaking on behalf of the industry, Mr Sridhar argued that from the budget speech of the Finance Minister, it clearly appeared that introduction of customs levy on exports of iron ore is based on Hoda Committee report, which has recommended that export duty be levied on export of iron ore in lump form with Fe content above 65. But, the industry was slapped with a Customs notification on Wednesday itself about the duty being applicable to all categories of ore and that too, with immediate effect.

Mining continues to be one of the leading sectors in the State in terms of foreign exchange earnings and employment generation.

Around 35,000 people are directly and indirectly employed in the industry, which earns close to Rs 3,500 crore in foreign exchange annually by operating around 80 mining leases in open cast mines.

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