Goa wants iron ore duty to go

Mines Secretary S Vijay Kumar,however,wrote to Revenue Secretary Sunil Mitra on March 21 that the export duty on iron ore needed to be calibrated with incentivisation of pelletisation and also enhancement of the 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.

Vijay Kumar called for a strategy for creation of agglomeration capacity to conserve ore,so that fines can be utilised. “If that is not done,exports will be necessary so that fines do not block the pithead and create environmental problems,” he said. He argued that the removal of export duties on pellets announced in the last Budget be positioned as a long-term strategy for creation of pelletisation capacity.

Of the total iron or production of 208 MT,fines account for about 126 MT and the agglomeration capacity is barely 68 MT. The existing sinerting facility in the country is 39 MT and pelletization 28.8 MT. The domestic steel industry,which produces 66 MT of steel consumes nearly 100 MT of iron ore. The low-grade of the mineral is used largely by the integrated plants. While the sponge iron industry relies heavily on ore lumps.

The steel industry,however,has been maintaining that continuous export of iron ore would result in India becoming a net importer of the mineral in the near future. The utilities have argued that if exports of the mineral continued the way as is happening now,then it would barely last for 30 years. While mega producers like SAIL and Tata have their captive resources,others rely mainly upon National Mineral Development Corporation (NMDC) or private producers for their steady supply.