BS reported that talks of reduction in iron ore export duty has received lukewarm responses from leading miners and mining bodies of the country as many believe that with higher rail fright cost and poor global demand coupled with local factors the rate cut may not give the shipments a big fillip.
Mr Basant Poddar head of Karnataka chapter of Federation of Indian Mineral Industries said that "The duty cut will not support exports immediately but gradually it could improve. The government also should take steps to reduce rail freights.”
Mr Poddar said that "As per the Supreme Court order, the miners have to cater to the local steel plant demand first and then for exports. Once all the mines are open, the export will gradually reach the peak in 2 to 3 years.”
Mr Prabodh Mohanty spokesperson for East Zone Mining Association said that “In Odisha about 40 million tonne iron ore fines are stacked with private miners. But due to a policy of the local government, we can sell only half of the amount to outside parties and rest should be kept reserve for local companies. Hence, there will not be any major change in export numbers.”
Indian Rail charges approximately INR 2,500 for each tonne of iron ore meant for exports much higher than the transport charge of the same commodity for sale within the country. Along with duty cut demand, the FIMI has been fighting for reduction in rail charges too. Besides high transport cost, local factors will not allow the shipments to grow up significantly if the government decides to slash the duty.
Karnataka used be the largest state for iron ore exports until the state government imposed a ban on exports in 2010. Though the Supreme Court has allowed exports only 12 out of 107 mines are currently in operation now, leaving limited space for outbound shipments.
