KOLKATA (miningweekly.com) - India would be able to ship out an additional 10-million tonnes of iron-ore during the remainder of the current fiscal year, with the government moving fast to slash export tax, according to the Mines Ministry.
Even without the ban on iron-ore mining in the Karnataka and Goa provinces being lifted, lowering export tax from 30% to 20% would enable miners to export an additional 10-million tonnes during the October 2012 to March 2014 period, the Mines Ministry said in a note prepared to support the reduction in export duty.
This could bump up total exports during the current year to 20-million tonnes, which is double the current estimates, the Ministry noted, observing that this would still be drastically lower than 117-million tonnes achieved three years ago before the clamp-down on illegal mining dealt a body blow to Indian iron-ore exports.
The Ministry was pushing for an early decision to prune the export duty to enable exporters to ride the current strenghtening, since June, of global iron-ore prices. Export offers for high-grade Indian iron-ore fines (with grading of 65.5% and above) had firmed up $10 to $15 over the past month to current levels of $135/t to $137/t CFR China.
The sharp depreciation of the Indian rupee against the dollar - 20% since April 2013 - had also triggered a rush to push exports, but traders representing Chinese steel mills were unable to commit to transactions with Indian miners/traders at the desired volumes, as most mines were going slow in increasing production owing to policy uncertainties, a representative of the Federation of India Mining Industry said.
A quick reduction in export duty would instill confidence among international iron-ore fines buyers over the stability of Indian policy and also enable miners to plan their production to factor in domestic demand for lumps and exportable surplus of fines, he said.
The Mines Ministry was preparing an affidavit to be submitted before India’s Supreme Court seeking resumption of mining in the iron-ore-rich provinces of Goa and Karnataka, where the court had imposed a ban following recommendations from a court-appointed and -empowered investigating committee.