The Hindu : Business : Chamber seeks blanket ban on iron ore exports

Online edition of India's National Newspaper
Tuesday, Jul 11, 2006

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Chamber seeks blanket ban on iron ore exports

Special Correspondent

Suggests levy of excise duty on the commodity to earn an annual revenue of Rs. 1,800-2,200 cr.

— FILE PHOTO

NOT AT DOMESTIC COST: Iron ore fines are being loaded at the newly built deep-draught general cargo berth at New Mangalore Port.

NEW DELHI: Seeking a change in the national policy on iron ore export, the Associated Chambers of Commerce and Industry (Assocham) on Monday urged the Government to slap a blanket ban on exports of the commodity and make it excisable at the rate of 16 per cent to help earn an annual revenue of between Rs. 1,800 crore and Rs. 2,200 crore.

In a representation submitted on issues concerning inputs for steel to the Union Mines Minister, Assocham says there is a fit case to review the national policy regarding iron ore exports and make it an accessible commodity, encouraging domestic iron ore producers to add value for higher returns in the form of steel exports.

The chamber chief, Anil K. Agarwal, said that at present, 54 per cent of ore produced in India is exported under the national policy on iron ore and, "if it is banned, the government will conveniently add to its exchequer about Rs. 1,800-2,200 crore per annum by imposing on the commodity an excise duty of 16 per cent." Over $4 billion of gross sale was generated through exports of iron ore and therefore its exports should be banned with immediate effect so that the country earns much higher revenue through value addition, he said..

The representation points out that, "although China is a major iron ore producer, the Chinese ore is of low grade. Hence, China has to import big quantities of iron ore to blend with its low-grade one. The current international trade in iron ore is driven by China. Chinese imports of iron ore increased significantly owing to its high demand for steel and a consequent rise in steel production.

"While the overall iron ore imports have registered an increase of 15 per cent in 2004 over 2003, Chinese imports rose by 40 per cent. This led to an increase in the Indian exports of good quality iron ore. Exports of Indian iron ore increased by 15 per cent to 90 million tonnes in 2005-06 from 78 million tonnes in 2004-05 while production rose by 14 per cent to 165 million tonnes from 145 million tonnes".

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