Budget 2015: Government may cut duty for iron ore exports from Goa

New Delhi: Keen on bailing out the struggling Goan iron ore sector, the Centre may soon announce a special package for miners in the state by pruning duty on exports of the steel-making raw material from 30 percent.

“Goa is a different case altogether. Iron ore produced in the state is not used domestically. Hence, I have written to the Finance Ministry seeking introduction of a different duty structure for exports of low-grade iron ore from the state,” Steel and Mines Minister Narendra Singh Tomar told reporters on the sidelines of an event here.

Mining plays an important role both for Goa’s economy and its people. However, mining activity in Goa is closed for over two years now, although the Supreme Court lifted the ban in April last year. On 15 January, the Goa government revoked its order of September, 2012 regarding suspension of mining operations.

Ban on mining coupled with an exorbitant 30 percent duty on iron ore exports made it difficult for miners in the state, which was once the largest exporting state from India. Their problem got compounded with the tumbling of the iron ore price globally to its five-and-a-half year low last week.

Welcoming the proposal, AN Joshi, Vice President, Sesa Sterlite said, “Iron ore prices have crashed so much in last few months. The Goan grade of ore is being sold at about $30 per tonne FOB. So, it is critical to withdraw the export duty to support restart of Goan iron ore industry.”

“We are eagerly waiting for a formal announcement from government of the same,” he added. Meanwhile, Tomar said his Ministry has also written to the Finance Ministry seeking an upward duty revision on steel imports that now ranges from 5-7.5 percent.

“I had requested to revise it as soon as possible, but as the Budget is round the corner, I would expect it to happen in the Budget only,” Tomar said.

In the first nine months of the current fiscal, steel imports into the country have zoomed around 60 per cent forcing Indian domestic steel-makers to hold on prices even as their margins are getting further squeezed.

The minister also said his ministry has taken a decision to notify an additional 31 minerals, presently under the list of major minerals, as minor minerals from the existing 24. The notification would be issued soon.

Regulatory and administrative jurisdiction of the minor minerals falls under the purview of state governments. These include the powers to frame rules, prescribe rates of royalty, contribution to District Mineral Foundation and the procedure for grant of mineral concessions among others.

“These 31 minerals account for over 55 percent of the total number of leases and nearly 60 per cent of total leased area,” an official statement said.

The minister also said that in order to strengthen the mineral inventory database, the government is planning to notify PSUs to carry out prospecting work. Geological Survey of India, which was hitherto involved preliminary prospecting, will also scale up its prospecting operations to ensure more authentic information on the reserves.

PTI