Steel ministry wants 20 per cent duty on iron ore to curb exports
by Ravi Kunder
30 January 2010
After the Indian government raised the export duty on iron ore last month, the steel ministry is reported to be seeking fresh hike to curb excess exports, especially to China.
China currently imports one-fifth of its annual iron ore from India.
In its budget recommendations, the steel ministry wants the government to curb the rising iron ore exports by imposing a 20-per cent export duty after the central government had doubled the export duty on iron ore lumps from 5 per cent to 10 per cent and on iron ore fines to 5 per cent from nil last month. (See: India raises export duty on iron ore by 5 per cent)
The steel ministry is in favour of promoting value addition within the country and conservating iron ore for domestic long-term use by the steel industry. According to the `National Mineral Policy' 2008, preference has to be given to value adders in the allocation of mineral concession.
Iron ore is the raw material used to make pig-iron, which in turn, is one of the main raw materials to make steel. About 98 per cent of the iron ore that is mined globally is used to make steel, which many analysts consider the most important commodity in the world after oil.
The production of iron ore in the country in the 2008-2009 was 227.64 million tonnes, and India, the fourth largest exporter of the ore after Vale of Brazil, and Anglo Australian miners Rio Tinto and BHP Billiton, exported about 106 million tonnes during the year, of which, 90.1 million tonnes was bought by China.