Iron Ore Duty India raises export duty on iron ore to 30pct
Tuesday, 03 Jan, 2012
In a major setback to the Indian iron ore miners, although after a long drawn battle between steel and mining ministry, the
Indian commerce ministry has raised the export duty on iron ore to 30% on both fines and lumps effective December 1st
2012
As the duty was previously 20%, the increase amounts to 10%, which translates to additional cost of about USD 13 per tonne
or INR 690 per tonne to USD 5 per tonne to INR 265 per tonne for various grades of iron ore considering the prevailing FOB
prices for 63.5%/63% and 50%/49%.
Various reactions are coming from the market players. While the miners are lamenting predicting severe dip in export
volumes, steel makers are happy that the availability in the domestic market would increase leading to possible reduction in
prices. The stock market has also reflected this sentiment on Monday, after the announcement.
Mr RK Sharma secretary general of Federation of Indian Mineral Industries said that “It will be the end of exports of iron ore
fines from India. With an already high 20% duty, export had declined 28% in the first eight months of the current financial
year.”
While India remains the third largest global exporter of iron ore, with 97.64 million tonnes in 2010-11, down from 117.3
million tonnes in 2009-10, exports have dipped by over 28% YoY to about 40 million tonnes in April to November 2011 as
compared to 55.5 million tonnes in April to November 2010.
As the hike in export tax by 10% has to be absorbed by the miner in current global market scenario of plenty, while it would
hurt miner by the amounts mentioned above, its effect on the export volumes remains hazy as the dip in Indian exports is
primarily due to clamp down on issues related to illegal mining rather than viability.
To know exact levels, likely scenario, domestic iron ore spot prices at Bellary and Barbil and FOB East Coast spot prices
subscribe to “Iron Ore Services” of www.steelprices-india.com by registering or sending a mail to
admin@steelprices-india.com along with your full contact details.
The accuracy and the speed of reporting changes is well appreciated by not only Indian miners, but by global iron ore majors
as well as Chinese mills as many of them have subscribed to this service to maintain another but solid listening post as far as
Indian spot market is concerned.
(Sourced from www.steelprices-india.com)