Bloomberg reported that India, the world third largest iron ore exporter is considering raising iron ore export taxes to 20% to increase local supplies and curb rising costs of the key steelmaking raw material.
This emerged after a meeting the Steel Secretary, Mr Atul Chaturvedi, had with steelmakers.
Mr Chaturvedi told “The tax structure on iron ore exports was discussed between different ministries today. We understand that the export tax on iron ore lumps may go up. A decision on increasing the tax is likely to come as early as this Friday.”
He said that “It’s my feeling the export tax will be raised to a uniform level of 20%. If China can take steps to cool down prices, why can’t we?”
The Standing Committee on Coal and Steel on Thursday also urged the Ministry of Steel to take up with the Ministry of Finance the issue of curbing iron ore exports. The committee expressed the concern that iron ore reserves may last only till 2021-22. Its report said “With a view to conserving iron ore for long-term use by the domestic steel industry and also to ensure its availability to them at an reasonable price, the Government must explore the possibility of restricting the export of iron ore.”
Iron ore producers though were concerned about the proposed increase in export tax and said it would have a negative impact on exports. Mr RK Sharma secretary general of the Federation of Indian Mineral Industries said “Exports will be affected if duties are raised.”
India in December imposed a 5% duty on exports of iron ore fines and doubled the tax on lump ore to 10%.
India's iron ore exports for 2009-10 were expected to be marginally higher at around 106 million tonnes as against 105 million tonnes in the previous year.