Friday, Jan 20, 2012
Talk about an opportunity wasted, literally.
Not long back, heaps of low-grade iron ore refuse lying unused in vast mining tracts of Goa had found a throbbing market in China. But thanks to the government’s recent hike in export duty, the ore material has once again lost its utility value, whatever little there was. The finance ministry on January 2 raised the export duty on iron ore to a flat 30% from the 20% earlier.
The result? The iron ore waste export market, which was turning into a steady cash flow for the state, the Centre and owners of the ore, died even before it was born. Out of an accumulated waste of 800 million tonne (mt), close to 80 mt was commercially saleable and had become a big source of revenues in the form of royalty and other duties.
This has come to a grinding halt, said Ambar Timblo, managing director, Fomento Resources, one of the biggest privately held mining companies in Goa. “The hike in export duty has rendered these low-quality ores commercially unviable due to the low price they fetch.” “Even if we consider an annual sale of 10 mt of this ore at an export duty of 10%, this would mean a royalty of `220 crore and an export duty value of `300 crore,” Timblo said.
To be sure, whenever a new mine goes on stream, several thousand tonnes of earth get dug up to reach to the premium ore content. This dug-out matter lies near mine pit heads as heaps of dumps.The low content of ferrous — between 45% and 52% — makes the ore highly unsuitable for use in India. In fact, none of the iron ore mined in Goa ever manages to make its way to any Indian plant. That explains why a huge chunk —as high as 99%— of the mineral is exported from Goa.
To its credit, the state government had some business sense and a few months ago, allowed export of very low-quality ore that had no takers. It’s back to square one.
(sourced DNA)
Showing posts with label export duty on iron ore. Show all posts
Showing posts with label export duty on iron ore. Show all posts
Friday, January 20, 2012
Monday, August 29, 2011
May hike export duties on iron ore exports: Steel minister
Mon,Aug29, 2011 | Source PTI
Government today said it may further increase duties on iron ore to discourage its export in order to keep it for meeting domestic demands.
"We have increased export duty from five per cent to 20%. We may increase it further," Steel Minister Beni Prasad Verma told the Lok Sabha during Question Hour.
Verma said government was discouraging export of iron ore and trying to keep it for domestic consumption.
Nearly 50% of the iron ore produced in the country has been exported over the last three years, he said.
In 2008-09 212.96 million tonnes (MT) of iron ore was produced of which 105.86 MT (49.7%) was exported and in 2009-10 218.64 MT ore was produced and 117.37 MT (53.7%) was exported, Verma said.
He said in 2010-11 the estimated production was 208.11 MT of which 97.66 MT (46.9%) was marked for export.
"The production of iron ore in the country is about to double the consumption of iron ore by the domestic iron and steel industry and therefore is sufficient to meet the present requirement of iron ore by the steel sector in the country,"
he said.
As regards iron ore supply to PSUs, Steel Authority of India Limited (SAIL) has is own captive mines which cater to its full requirement of iron ore, he said.
Verma said the requirement of iron ore of other PSUs - Rashtriya Ispat Nigam Limited and KIOCL Ltd - is fulfilled by National Mineral Development Corporation.
Government today said it may further increase duties on iron ore to discourage its export in order to keep it for meeting domestic demands.
"We have increased export duty from five per cent to 20%. We may increase it further," Steel Minister Beni Prasad Verma told the Lok Sabha during Question Hour.
Verma said government was discouraging export of iron ore and trying to keep it for domestic consumption.
Nearly 50% of the iron ore produced in the country has been exported over the last three years, he said.
In 2008-09 212.96 million tonnes (MT) of iron ore was produced of which 105.86 MT (49.7%) was exported and in 2009-10 218.64 MT ore was produced and 117.37 MT (53.7%) was exported, Verma said.
He said in 2010-11 the estimated production was 208.11 MT of which 97.66 MT (46.9%) was marked for export.
"The production of iron ore in the country is about to double the consumption of iron ore by the domestic iron and steel industry and therefore is sufficient to meet the present requirement of iron ore by the steel sector in the country,"
he said.
As regards iron ore supply to PSUs, Steel Authority of India Limited (SAIL) has is own captive mines which cater to its full requirement of iron ore, he said.
Verma said the requirement of iron ore of other PSUs - Rashtriya Ispat Nigam Limited and KIOCL Ltd - is fulfilled by National Mineral Development Corporation.
Thursday, March 3, 2011
Indian iron ore exports to come down by up to 35pct - FIMI
Thursday, 03 Mar 2011, Press Trust of India
Miners' body the Federation of Indian Mineral Industries said as a fallout of the duty hike on iron ore exports in the Budget, India's outbound shipment of the key steel making raw material will come down by up to 35%.
Mr Siddharth Rungta president of FIMI told PTI that "Our logistics costs are already high. The rise in export duty will make it more uncompetitive. I sense iron ore exports from the country will dip by 30% to 35% on an annual basis as a result."
Mr Rungta said that the organization would request the government to reconsider its Budgetary proposal by highlighting possible fallouts of the duty hike move soon.
He said that "Because of the hike in export duty, no fresh contracts are signed now. Only earlier contracts are being honored. Though the impact of export duty hike is not being immediately felt, it will be felt within a month."
Mr Rungta said that the hike in export duty would also lead to lower domestic production of the raw material resulting to an increase in price. Though the cost of mining iron ore in India is more or less the same when compared with others in the global arena, handling and transportation cost here is far higher than other global producers.
While the finance minister Mr Pranab Mukherjee justified the move to increase export duty on the pretext of ensuring raw material security, FIMI maintain there would be no dearth of iron ore in the country for at least next 200 years as India has sufficient reserves to feed the domestic plants.
Mr Siddharth Rungta president of FIMI told PTI that "Our logistics costs are already high. The rise in export duty will make it more uncompetitive. I sense iron ore exports from the country will dip by 30% to 35% on an annual basis as a result."
Mr Rungta said that the organization would request the government to reconsider its Budgetary proposal by highlighting possible fallouts of the duty hike move soon.
He said that "Because of the hike in export duty, no fresh contracts are signed now. Only earlier contracts are being honored. Though the impact of export duty hike is not being immediately felt, it will be felt within a month."
Mr Rungta said that the hike in export duty would also lead to lower domestic production of the raw material resulting to an increase in price. Though the cost of mining iron ore in India is more or less the same when compared with others in the global arena, handling and transportation cost here is far higher than other global producers.
While the finance minister Mr Pranab Mukherjee justified the move to increase export duty on the pretext of ensuring raw material security, FIMI maintain there would be no dearth of iron ore in the country for at least next 200 years as India has sufficient reserves to feed the domestic plants.
Tuesday, March 1, 2011
Budget update - Indian miners cry foul over iron ore export tax hike
Tuesday, 01 Mar 2011, PTI
Indian finance minister Mr Pranab Mukherjee’s move did not gel well with the Federation of Indian Mineral Industries, which saw steel cartel of few majors behind the hatching of the move and termed it as a huge blow for domestic iron ore producers.
Mr RK Sharma general secretary of FIMI, while observing that the entire proposal was self defeating, warned that production will come down as a result of which steel prices will go up making end users suffer.
He said “The entire proposal is self defeating. It too means a huge loss to the exchequer, he said adding the future of 1 million people directly employed with the mining industry is also at stake.”
Tags : raw material, steel mills, Steelmakers,
Budget update - TATA Steel reaction on the Union Budget FY 12
Tuesday, 01 Mar 2011
TATA Steel said that “I rate Union Budget FY 12 as a balanced budget and a budget that is non-disruptive. FM is continuing with the policies of the Government since it came to power keeping the focus on growth and inclusiveness. The Government continues its endeavor to maintain robust economic growth and steady fiscal consolidation by focusing on economic inclusion, liberalizing FDI policy, boosting investment in infrastructure, agriculture and the social sector and simplification of procedures. The budget has to be seen in the context of the measures already announced and I am sure there will be several other measures that Government will announce progressively, to ensure that the economy exceeds the 9% GDP level at the earliest.”
“The Government's target GDP growth rate of 9% and commitment to bring down fiscal deficit to 4.6% of GDP for FY 2011-12 and 3.5% of GDP by FY 2014 are statements that hold a lot of promise. There has been a positive change in the quantum of fiscal deficit for FY 2010-11 which was at 5.1% of GDP against the previous budget estimate of 5.5%. The FM affirmed his resolve to introduce DTC from 1st April 2012. However as regards GST, the rollout including constitutional amendment is still in progress.”
“The increase in MAT rate, when it is felt that it is already high, would not have a beneficial effect on the industry, although this would be marginally offset by the reduction in surcharge. The imposition of MAT on SEZ developers will have an adverse effect on SEZs.”
“On personal taxes front, while the exemption limit has been increased to INR 180,000, there was need for greater increase keeping in mind the stubborn inflation over the past year and other factors. The liberalization of existing scheme of interest subvention of 1% on housing loan and enhancing housing loan limit to INR 2.5 million for dwelling units under priority sector lending are positives.”
“The focus on infrastructure sector is in keeping with India's insatiable need for enhanced infrastructure. India suffers from severe infrastructure deficit and any steps that are taken towards improving infrastructure are welcome. An increase of 23.3% over last year for infrastructure allocation, policy for development of PPP projects, increasing FII limits for investments in corporate bonds by USD 20 billion to USD 40 billion, and proposed issue of Tax free bonds of INR 30,000 crore will help in the process of capital formation and infrastructure development necessary to sustain the economic growth of the country. Industries like steel, that have high capital outlays and also have high contribution towards creating infrastructure, should have been categorized as infrastructure industry too.”
“While steps have been taken for the food sector in the form of steps announced for Food Security Bill, Mega Food Parks, Agriculture Produce Marketing Act, storage capacity and cold chains, allocations to various schemes, etc., the budget could have offered more on the short term measures to contain food inflation.”
“The continuation of the disinvestment policy with a target of INR 40,000 crores in FY 12 is a welcome measure.”
“I also believe that there was an opportunity to develop Mumbai as an international financial center in view of the decline of traditional financial centers in the West and elsewhere, but the measures expected to be announced in this regard fall short of what could have been done to capitalize on this opportunity. The various legislations proposed in 2011-12 and discussions to liberalize FDI policy are a positive. Foreign investment in mutual funds would enable greater inflows and greater participation in the Indian capital markets but at the same time, this would also require careful monitoring. Funds provided for capitalization of Public Sector Banks, Regional Rural Banks and NABARD are also strong positive measures to ensure financial robustness of these banks and encourage financial inclusion, though the banks are likely to require greater capitalization to cope with increasing growth.”
“The green orientation of the budget in the form of national mission for hybrid and electric vehicles, allocations for Green India Mission, Environmental Remediation Programs show the commitment of Government to addressing environmental challenges facing the country. The greater allocations for social sector (by 17%) and education (by 24%) are also welcome positives but delivery and execution in these areas are crucial, especially keeping in mind the recent governance failures.”
“The increase in export duty on iron ore exports (lumps and fines) to a uniform rate of 20% with the intention of encouraging value addition within the country is a step in the right direction but the exemption of duty on pellets also reduces the scope for greater value addition within the country. The value addition at the pelletization stage is much less compared to finished steel stage and the aim should be to encourage steel production within the country, which would lead to more jobs, output and value addition within the country. It has been a persistent demand of the steel industry to include steel plants as infrastructure industry and it is hoped that steel plants would be included in infrastructure as capital investment in fertilizer production has been included in this budget. FM may still consider this request of the steel industry.”
“The Government's target GDP growth rate of 9% and commitment to bring down fiscal deficit to 4.6% of GDP for FY 2011-12 and 3.5% of GDP by FY 2014 are statements that hold a lot of promise. There has been a positive change in the quantum of fiscal deficit for FY 2010-11 which was at 5.1% of GDP against the previous budget estimate of 5.5%. The FM affirmed his resolve to introduce DTC from 1st April 2012. However as regards GST, the rollout including constitutional amendment is still in progress.”
“The increase in MAT rate, when it is felt that it is already high, would not have a beneficial effect on the industry, although this would be marginally offset by the reduction in surcharge. The imposition of MAT on SEZ developers will have an adverse effect on SEZs.”
“On personal taxes front, while the exemption limit has been increased to INR 180,000, there was need for greater increase keeping in mind the stubborn inflation over the past year and other factors. The liberalization of existing scheme of interest subvention of 1% on housing loan and enhancing housing loan limit to INR 2.5 million for dwelling units under priority sector lending are positives.”
“The focus on infrastructure sector is in keeping with India's insatiable need for enhanced infrastructure. India suffers from severe infrastructure deficit and any steps that are taken towards improving infrastructure are welcome. An increase of 23.3% over last year for infrastructure allocation, policy for development of PPP projects, increasing FII limits for investments in corporate bonds by USD 20 billion to USD 40 billion, and proposed issue of Tax free bonds of INR 30,000 crore will help in the process of capital formation and infrastructure development necessary to sustain the economic growth of the country. Industries like steel, that have high capital outlays and also have high contribution towards creating infrastructure, should have been categorized as infrastructure industry too.”
“While steps have been taken for the food sector in the form of steps announced for Food Security Bill, Mega Food Parks, Agriculture Produce Marketing Act, storage capacity and cold chains, allocations to various schemes, etc., the budget could have offered more on the short term measures to contain food inflation.”
“The continuation of the disinvestment policy with a target of INR 40,000 crores in FY 12 is a welcome measure.”
“I also believe that there was an opportunity to develop Mumbai as an international financial center in view of the decline of traditional financial centers in the West and elsewhere, but the measures expected to be announced in this regard fall short of what could have been done to capitalize on this opportunity. The various legislations proposed in 2011-12 and discussions to liberalize FDI policy are a positive. Foreign investment in mutual funds would enable greater inflows and greater participation in the Indian capital markets but at the same time, this would also require careful monitoring. Funds provided for capitalization of Public Sector Banks, Regional Rural Banks and NABARD are also strong positive measures to ensure financial robustness of these banks and encourage financial inclusion, though the banks are likely to require greater capitalization to cope with increasing growth.”
“The green orientation of the budget in the form of national mission for hybrid and electric vehicles, allocations for Green India Mission, Environmental Remediation Programs show the commitment of Government to addressing environmental challenges facing the country. The greater allocations for social sector (by 17%) and education (by 24%) are also welcome positives but delivery and execution in these areas are crucial, especially keeping in mind the recent governance failures.”
“The increase in export duty on iron ore exports (lumps and fines) to a uniform rate of 20% with the intention of encouraging value addition within the country is a step in the right direction but the exemption of duty on pellets also reduces the scope for greater value addition within the country. The value addition at the pelletization stage is much less compared to finished steel stage and the aim should be to encourage steel production within the country, which would lead to more jobs, output and value addition within the country. It has been a persistent demand of the steel industry to include steel plants as infrastructure industry and it is hoped that steel plants would be included in infrastructure as capital investment in fertilizer production has been included in this budget. FM may still consider this request of the steel industry.”
Budget update -Indian steel companies cheer iron ore export tax hike
Tuesday, 01 Mar 2011
India's steel industry cheered the 20% export duty hike on iron ore in the FY12 federal budget that will help contain escalating raw material costs and gave thumbs up to higher infrastructure spends, which will boost steel demand in the country.
Mr CS Verma chairman of Steel Authority of India said that "Higher export duty on iron ore has been a long pending demand of the steel industry and the budget has taken care of the issue.”
Mr H M Nerurkar MD of TATA Steel said “The increase in export duty is a step in the right direction but the exemption of duty on pellets also reduces the scope for greater value addition within the country. The value addition at pelletization stage is much less as compared to finished steel stage and aim should be to encourage steel production within the country, which would lead to more jobs, output and value addition within the country.”
Mr Sajjan Jindal vice CMD of JSW Steel hailing the move said this would lead to greater value addition at home and encourage domestic steel industry.
Mr K Ranganath CMD of KIOCL observed that iron ore is a natural resource which needs to be conserved. He said “Export of a value added product from iron ore will not only generate value in export but also provides higher scope for employment and generation of wealth in the value added industry.”
Mr Nittin Johari CFO of Bhushan Steel said that "The increase in export duty on iron ore will increase its availability in the domestic market, thereby stabilizing price and helping domestic steelmakers.”
Mr Ankit Miglani director at Uttam Galva Steels said that "There is nothing dramatic but there are more positives for the steel sector in this budget than negatives.”
(sourced:ET and PTI)
India's steel industry cheered the 20% export duty hike on iron ore in the FY12 federal budget that will help contain escalating raw material costs and gave thumbs up to higher infrastructure spends, which will boost steel demand in the country.
Mr CS Verma chairman of Steel Authority of India said that "Higher export duty on iron ore has been a long pending demand of the steel industry and the budget has taken care of the issue.”
Mr H M Nerurkar MD of TATA Steel said “The increase in export duty is a step in the right direction but the exemption of duty on pellets also reduces the scope for greater value addition within the country. The value addition at pelletization stage is much less as compared to finished steel stage and aim should be to encourage steel production within the country, which would lead to more jobs, output and value addition within the country.”
Mr Sajjan Jindal vice CMD of JSW Steel hailing the move said this would lead to greater value addition at home and encourage domestic steel industry.
Mr K Ranganath CMD of KIOCL observed that iron ore is a natural resource which needs to be conserved. He said “Export of a value added product from iron ore will not only generate value in export but also provides higher scope for employment and generation of wealth in the value added industry.”
Mr Nittin Johari CFO of Bhushan Steel said that "The increase in export duty on iron ore will increase its availability in the domestic market, thereby stabilizing price and helping domestic steelmakers.”
Mr Ankit Miglani director at Uttam Galva Steels said that "There is nothing dramatic but there are more positives for the steel sector in this budget than negatives.”
Monday, February 28, 2011
SAIL Chairman C. S. Verma's reaction to the Budget
New Delhi, 28 February, 2011
"The Budget is firmly growth-oriented and has various positives for the steel industry.
The Govt’s continued thrust on development of infrastructure and manufacturing will help steel demand in the country to grow. Besides, higher support for the housing sector is a step in the positive direction.
"Higher export duty on iron ore has been a long pending demand of the steel industry and the Budget has taken care of the issue by increasing the export duty to 20%. This should ensure higher availability of iron ore for the Indian steel industry.
Again, withdrawal of export duty on pellets should encourage installation of pellet plants by mining companies. More pellet plants in the country will also benefit the steel industry.
"Further, reduction in surcharge on income tax from 7.5% to 5% will have a positive impact on domestic companies, making available disposable surplus for investment. The proposed Constitutional Amendment Bill on GST is also a welcome development."
The Govt’s continued thrust on development of infrastructure and manufacturing will help steel demand in the country to grow. Besides, higher support for the housing sector is a step in the positive direction.
"Higher export duty on iron ore has been a long pending demand of the steel industry and the Budget has taken care of the issue by increasing the export duty to 20%. This should ensure higher availability of iron ore for the Indian steel industry.
Again, withdrawal of export duty on pellets should encourage installation of pellet plants by mining companies. More pellet plants in the country will also benefit the steel industry.
"Further, reduction in surcharge on income tax from 7.5% to 5% will have a positive impact on domestic companies, making available disposable surplus for investment. The proposed Constitutional Amendment Bill on GST is also a welcome development."
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