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Hike in duty to hit iron ore exports at AP ports

BS reported that iron ore exports from three ports Visakhapatnam, Gangavaram and Kakinada may drop 15% to 20% during the next financial year due to the hike in export duty.

Gangavaram port exported 2.2 million tonne iron ore in 2009-10 and during the current year up to February, this stood at 2.5 million tonnes. Vizag port, on the other hand, exported 12.67 million tonne iron ore fines in 2008-09 and 14.38 million tonne in 2009-10. In the current year up to end of February, ore exports touched 13.16 million tonne.

Iron ore exports at Kakinada port have already dropped drastically and may fall further in the next financial year. Kakinada port exported 2.5 million tonne iron ore in 2009-10, and in the current year it exported only 1 million tonne up to February.

Gangavaram port sources said that “The Railways has increased its freight rates by INR 800 per tonne and if export duty increases to 20 per cent, our ore prices will not be attractive in the international market.”

Apart from this, the recent tsunami in Japan will also impact ore exports from Visakhapatnam port over the next two to three months. State owned NMDC and MMTC Limited export 3 to 4 million tonne iron ore to Japan from Vizag port every year.

In the budget 2011-12, the rate of export duty for lump and fine iron ore has been enhanced and unified at 20% ad valorem, while iron ore pellets have been fully exempted.

(Source:BS)