KOLKATA (miningweekly.com) – The Indian government is considering more gradations in iron-ore fines, based on ferrous content that will offer partial relief from the incidence of export tax.

The Mines Ministry has constituted a committee to review the existing export duty structure on iron-ore fines and to reconcile conflicting demands from various segments of the mining and steel producing sectors.

Though the committee is yet to announce its final recommendations, sources have indicated that the Ministry will create a category of “medium grade iron-ore fines”, for ferrous content ranging 58% to 62%, for which the government will either reduce or scrap the export duty.

Under the current export duty structure, iron-ore fines with ferrous content above 58% is categorised as “high grade”, attracting a 30% export duty, while low grade ore with ferrous content below 58% attracts a nil rate.

Sources say that the high rate of export tax of 30% will be continued in the case of high-grade iron-ore fines with ferrous content above 62%.

Tweaking the rates by reclassifying the grades was necessitated by the need to satisfy all segments of the industry, with miners and steel producers putting in conflicting demands.

The representative body of the miners, the Federation of Indian Mineral Industries, has sought a blanket scrapping of the 30% export tax across all grades of iron-ore fines. At the same time, the Pellet Manufacturers Association of India and the Steel Ministry, supporting steel producing companies, have sought a blanket ban on all exports of iron-ore from the company, to ensure higher domestic value addition and availability of higher volumes of cheap raw material to local steel mills.

To counter the latter demand, Indian iron-ore miners have pointed out that while there are virtually no buyers in international markets for low grade iron-ore fines of ferrous content below 58%, the mining industry has been left saddled with significant stockpile of fines of grades between 58% and 62% as international buyers are only interested in concluding transactions for grade above 63.5%.