Assocham demands for immediate ban on mineral exports

New Delhi, Feb 21 (UNI) Industry body Assocham today urged the Government to immediately ban export of minerals and raw materials to help the domestic industry.

''We demand immediate ban on mineral exports not only to help the domestic industry make finished products at competitive rates and save its mineral wealth, but attract huge investments from all over the world particularly under WTO regime,'' Assocham President Venugopal N Dhoot wrote in a communication to the Ministry of Commerce and Industry, Finance and Planning Commission.

As per the existing mineral policy, the Government gets royalties between Rs 10 and Rs 27 per tonne of iron ore extracted, depending on grades.

''In the unfortunate event of the Government not revising the mineral policy by putting a cap on the mineral export, India would very soon become the net importer of minerals and metals,'' Mr Dhoot said.

In addition, India will become a dumping ground for China and our dependence with countries like China, Brazil and Australia will increase enormously, he opined.

During 2005-06, the contribution from the mining companies to the national exchequer was around Rs 300 crore whereas the Government earned around Rs 15,000 crore from the steel sector for the same period, including 16 per cent of excise duty, four per cent of sales tax/ VAT plus the applicable royalty on iron ore.

The Hoda Committee had set a target of 100 million tonnes of iron ore export by the year 2020 which has already been achieved in the current financial year.

Indian iron ore exports are growing at an average of over 15-20 per cent for the last two to three years.

In the year 2005-06, total production of iron ore was around 165 million tonnes out of which around 90 million tonnes were produced by the non-captive private sector mining companies.

The few private sector mining companies exported over 90 per cent of their production during the period. On the other hand, the steel imports had grown over 70 per cent in 2005-06 from 42 per cent in 2004-05, indicating the growth of steel consumption in the country which had grown at a rate of around 16 per cent over the last two years.

India alone exports 90 million tonnes of iron ore with lowest per capita resources.

Brazil and Australia have enormous per capita and gross reserves and much higher steel consumption levels than India, yet these countries preserve their minerals, while India continues to liberally permit their exports, the chamber said adding that the exports have curtailed employment prospects.

It also suggested that iron ore security is vital as a developing nation like India would be producing and consuming over 250 million tonnes of steel in near future.

Various steel industries have already signed 140 MoUs for steel production, most of them are pending for execution due to non-availability of iron ore and land.

Iron ore security atleast at a market driven price is at anchor of investment in the steel industry but there should not be any subsidy to steel industry by allotment of captive mines, the industry body said.

UNI