Export duty exemption to help KIOCL pellet plant

A.J. Vinayak Mangalore | Updated on February 28, 2011 Published on February 28, 2011

The full export duty exemption for value-added iron ore products will help pellet manufacturer KIOCL Ltd (formerly Kudremukh Iron Ore Company Ltd). The company has a pellet plant in Mangalore.

Mr K. Ranganath, Chairman-cum-Managing Director of KIOCL Ltd, told Business Line that the KIOCL's pellet plant was set up for exports, and the export duty is generally borne by the company. So, unless the company recovered the total variable cost, it was not in a position to sell, because of the duty.

“With export duty not being there, the company will be able to trade at lower values also, and still able to keep its head above the water. So the company's profitability will definitely go up. With this, we can have better turnover, better use of iron ore pellet plant, and better employment generation,” he said.

Sales figures

Till February-end of 2010-11, the company recorded sales of 1.88 million tonnes. Of this, the export figure was 0.76 million tonnes, worth Rs 624 crore. “On the export quantity, we have made an export duty of Rs 91 crore till February-end,” Mr Ranganath said.

He said that iron ore pellet manufactured is a value-added product. The Government is repeatedly saying that value addition should take place with natural resources. If value-addition is taking place and it is not recognised as one , then nobody will try to set up plants for such products.


The full exemption from export duty for iron ore pellets will encourage setting up pellet plants. Even the steel industry will be encouraged to consume it, as the pellets will be produced at a lesser cost by increasing productivity. The proposal will effectively put to use the mountains of iron ore fines in the county, he added.

In a recent media interaction, Mr Ranganath had said that the company is expected to make a profit of Rs 75 crore in the current fiscal. The company made a loss of Rs 177 crore in 2009-10, following the global economic meltdown.

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Published on February 28, 2011
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