Goa CM wants duty reduction on iron ore exports

Days after Goa chief minister Digamber Kamat called for prime minister Manmohan Singh's intervention for scrapping the 20-per cent ad valorem export duty on iron ore fines, the mines ministry has said that exports be allowed till domestic steel makers built enough capacity to consume the entire fines production of 126 million tonnes.

In a letter to the prime minister dated 11March, Kamat had said the government's decision to impose an ad valorem 20 per cent duty on iron ore would hurt the financial health of the coastal state.

''The enhanced duty will only serve to curtail the export of iron ore from my state, which will drastically reduce our revenue resources. Besides, mining and tourism are the backbone of the Goan industry, so they have to be encouraged both in the interests of the nation and the state,'' Kamat wrote demanding the duty be slashed to 5 per cent.

S Vijay Kumar,  mines secretary, however, wrote to revenue secretary Sunil Mitra on 21 March that there was a need to calibrate the export duty levied on iron ore along with incentivisation of pelletisation and augmentation of agglomeration (fusion of fines into larger lumps by igniting them at low temperature) capacity.

''Unless such capacity came up, any export duty on fines may at best, be oriented towards mopping up of revenue rather than restricting exports,'' he said.

He favoured a strategy for creation of agglomeration capacity or ore conservation, to make way for fines utilisation.