The Hindu Business Line : Export duty on iron ore may be hiked

‘We oppose it’: The Minister for Mines, Mr Sis Ram Ola, addressing a press conference in the Capital on Thursday, said his Ministry would resist new export taxes. –

Ambarish Mukherjee

New Delhi, April 10 In order to moderate iron ore prices and thereby control steel prices and curb inflation, the Government is toying with the idea of revising the iron ore export duty structure and bring in a mix of fixed and ad-valorem duties.

As of now, iron ore exports attract a fixed ad-hoc duty. Ore containing up to 62 per cent iron attracts a duty of Rs 50 per tonne while exporters of ores with higher iron content have to pay an export duty of Rs 300 per tonne.

“The talk doing the rounds within the Government is to fix the export duty on lower grade ores (up to 62 per cent iron content) at Rs 300 per tonne, which is what the Finance Minister had initially proposed in his last year’s Budget speech when this tax was introduced,” sources said.

In case of ores having more than 62 per cent iron, the idea is to introduce a 15 per cent ad-valorem duty on exports, sources said.

Any final decision is subject to the approval of the Cabinet Committee on Pricing, which is expected to have its next meeting before the Parliament session begins next week, sources said.

Meanwhile, the Minister for Mines, Mr Sis Ram Ola today said his Ministry would oppose any move to impose fresh tax on iron-ore exports.

He also claimed that India has iron ore reserves that would last for next 200 years. However, he did not provide any data in support of the claim. “The value component of iron-ore is the lowest in steel making. Any fresh tax will adversely affect the sector,” Mr Ola said on the sidelines of a press conference unveiling the National Mineral Policy 2008.

Allaying fears of the mineral-rich State Governments about the new mining policy, the Mining Secretary, Mr J. P. Singh, said that the policy did not curtail the States’ rights to make priority-based allocation of mines to potential investors.

“There was nothing in the policy that could reduce their powers,” he said.