FIMI urges Govt to reduce export duty on iron ore

New Delhi, July 7: The Federation of Indian Mineral Industries (FIMI) has urged the government to imediately remove the export duty on low grade iron ore as it is adversely affecting the performance of the minng sector in the country.

Addressing newspersons FIMI President D K Sahni said the iron ore mining companies are loosing Rs 300 per tonne on the exports which were already been entered and no fresh contracts were being signed.

As a result the exports has declined by over 3 per cent during April-May this year with prospect of a further fall.

By the time the monsoon is over the decline in exports will be over by 15 to 20 per cent, he added.

During 2006-07 the industry exported around 93 million tonnes (MT) of low grade iron ore.

Mr Sahni said the question of conserving the domestic resources does not arise as the country have huge resources.

He regretfully stated that the mining industry in the eastern sector has offered the steel industry to lift 20 MT of low grade iron at a price to be determined later and the offer was made to the industry in writing but so far nobody has lifted a single tonne.

The domestic steel producers were not equipped to handle the low grade iron ore for the manufacture of steel, he added.

The mining sector is second to plantation sector in terms of taxation and in order to avoid further confusion for this sector the government should impose an uniform royalty rate.

He said the impostion of ad-valoram royalty rates will only bring more trouble for the industry as the government agencies will than fix the tax rate at the highest slab irrespective of the selling price of iron ore by the individual.

''Except the East European countries the system of captive block is not followed. Even in these counries the system is governement controlled. However, in India the foreign players enter the steel sector only with an eye of securing a captive iron ore mining block,'' said Mr Sahni.

Mr Sahni said the industry is not opposed to the concept of foreign companies controlling the mining sector but suggested that the foreign players instead take over the controlling stake from the domestic players.

''The industry accepted the position of captive mining under the Hooda committee as a compromise step as there was no other option for the industry,'' said Mr Sahni.

The domestic steel prices are high because of the under utilisation of resources by the steel producers, he added.

Responding to questions on what is the actual reserve position of iron ore, Mr Sahni said it is difficult to make a specific estimate as large blocks which are with two to three major players are not been taken into account while calculating the actual reserve position.

UNI