Monday, 11 Jul 2011
Indian iron ore exports for the current financial year may drop by a fifth to 75 million tonne. Federation of Indian Mineral Industries has said that this is attributed to the delay in lifting of export ban by Karnataka.
Also, the fact that Indian iron ore is turning uncompetitive in the overseas market due to increased export duty and freight rates.
Mr Siddharth Rungta president of FIMI said that “We expect iron ore exports to be between 70 million tonne and 75 million tonne this year against 95 million tonne in previous year.”
Curbs on exports by Orissa and Karnataka during different periods last year had resulted in 19% decline at 95 million tonne in 2010-11 from 117 million tonne in the previous year.
Despite the Supreme Court order, the Karnataka government is yet to lift the ban on exports. The state government is waiting for the Central Empowered Committee to complete the ongoing probe into illegal mining in the State.
The increase in rail freight rates and the hike in export levy at 20% have eroded the competitiveness of Indian iron ore, Mr Rungta said that Also, the proposed royalty sharing mechanism would further have an impact and will affect the development of the mining industry.
The government as part of the draft mining Bill has proposed a royalty sharing mechanism, wherein mining companies other than coal have to contribute an amount equivalent to the royalty paid on the minerals for the welfare of the project affected people. He added that “We request the Mines Minister to have a rethink on the quantum of royalty contribution and bring it down to 26% from 100%.”
(sourced from ET)
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