The Hindu : Karnataka / Bangalore News : Scrap iron ore export duty: industry

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Wednesday, Feb 06, 2008
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Karnataka

Karnataka - Bangalore

Scrap iron ore export duty: industry

Staff Reporter

Centre urged to strengthen railway network, ports to help increase exports

Producers ready for public-private partnership
However, Centre’s response has been lukewarm

BANGALORE: The Federation of Indian Mineral Industries (FIMI) on Tuesday urged the Centre to strengthen infrastructure — the railway network and ports — for iron ore export and abolish export duty on iron ore as well as ore fines.

Speaking to reporters here, senior committee member of FIMI Basant Poddar said iron ore producers in the country were affected by sheer lack of infrastructure, right from the production field to ports. While there was an absolute lack of a railway network and railway wagons for the transportation of iron ore to ports, a majority of the ports lacked sophisticated loading and unloading facilities, he rued.

Though the producers were prepared for a public-private partnership for the augmentation of infrastructure, the response from the Union Government was lukewarm. However, FIMI’s joint venture with the Karnataka Government for the development of the Tadari port in Uttara Kannada district was on the right track with indications that the Government would clear the project within two months, he said.

He said iron ore exports to China shot up after 2003 and now formed 85.47 per cent of the country’s total iron ore exports. However, the demand from China might not last long and the producers and exporters had to find new markets. New markets could be captured only with better and cheap modes of transportation, he said.

Demand

Reiterating its demand to abolish export duty of Rs. 300 a tonne on iron ore and Rs. 50 a tonne on iron ore fines, FIMI said the abolition would help the industry compete with Australia and Brazil. Presently India exports nearly 90 million tonnes of iron ore to China, and the ruling spot price is $90 a tonne.

Spot prices are so volatile in China that it can very easily go downwards. Mr. Poddar said while Australia and Brazil were spending billions of dollars in exploration activities, which included fast track reconnaissance permit, exploration licences and availability of sophisticated aerial survey, the Indian industry was facing many problems, including on the infrastructure front.

The former FIMI president Pichamuthu was present during the interaction.

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