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Iron ore industry seeks duty rationalisation in exports, rail freight charges

The iron ore industry, which has been hit by the Supreme Court clampdown to check rampant illegal mining, hopes to get some respite in the form of duty rationalisation in exports along with freight charges in the upcoming Budget, industry players have said.

“We hope the Government will reduce export levy on iron ore fines to push exports. Also, some kind of duty rationalisation should be done in rail freight charges to give a boost to this industry,” the Federation of Indian Mineral Industries' Southern Region Chairman, Mr Basant Poddar, told PTI from Bangalore.

At present, while railway freight charges for domestic iron ore movement stand at around Rs 900 per tonne, it is around Rs 2,800 for exports.

“As there is a large discrepancy in the charges, we want them to be rationalised in the upcoming Budget (Railway and General),” Mr Poddar said.

He said the levy on iron ore fines should be reduced to encourage exports.

Another official from a Karnataka-based mining firm echoed similar views. “In FY’12, exports of iron ore have already been down significantly. As per our estimates, it will be down by around 55 per cent in the current fiscal,” said the official, who did not want to be named.

India produces around 200 million tonnes of iron ore per year, 60-65 per cent of which are exported, mostly to China. In FY11, exports stood at 110 mt.

Most of the iron ore exported from the country are lower-grade fines, which are mainly produced from Goa, Odisha and Karnataka, among others.

Referring to the illegal mining and subsequent closure of mines in major producing states, the official said while illegal mining should be curbed, the sector as a whole should not suffer due to activities of a few players