Indian iron ore exports for the current financial year may drop by a fifth to 75 million tonnes, the Federation of Indian Mineral Industries (FIMI) has said.

This is attributed to the delay in lifting of export ban by Karnataka. Also, the fact that Indian iron ore is turning uncompetitive in the overseas market due to increased export duty and freight rates. “We expect iron ore exports to be between 70 mt and 75 mt this year against 95 mt in previous year,” said Mr Siddharth Rungta, President, FIMI.

Curbs on exports by Orissa and Karnataka during different periods last year had resulted in 19 per cent decline at 95 mt in 2010-11 from 117 mt in the previous year.

Despite the Supreme Court order, the Karnataka Government is yet to lift the ban on exports. The State Government is waiting for the Central Empowered Committee to complete the ongoing probe into illegal mining in the State. “We hope the exports should resume soon,” Mr Rungta said.

The increase in rail freight rates and the hike in export levy at 20 per cent have eroded the competitiveness of Indian iron ore, Mr Rungta said. Also, the proposed royalty-sharing mechanism would further have an impact and will affect the development of the mining industry, he added.

The Government as part of the draft mining Bill has proposed a royalty sharing mechanism, wherein mining companies other than coal have to contribute an amount equivalent to the royalty paid on the minerals for the welfare of the project affected people. “We request the Mines Minister to have a rethink on the quantum of royalty contribution and bring it down to 26 per cent from 100 per cent,” he said.

Further, Mr Rungta urged the Government to reconsider the 20 per cent export duty on iron ore, imposed this year.

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