New Delhi: Domestic iron ore miners today said their export revenue has slumped by about Rs1,000 crore owing to rupee appreciation and demanded abolition of export duty on the mineral to offset the losses.
“We have already lost about 15% of our export revenue, which is about Rs 1,000 crore, owing to rupee appreciation. We seek immediate abolition of export duty to enable us offset the losses sustained,” Federation of Indian Mineral Industries (FIMI) president Rahul N Baldota told PTI.
He said imposition of export duty coupled with rupee rise against the dollar has served a “double whammy” to the miners and could lead to further trouble if no succour was provided to them.
“The only way through which the government could help us was to remove the export duty on iron ore,” Baldota said, pointing out that currently the export duty on iron ore fines above 62 Fe grade was Rs300 and that of fines below the said grade was Rs50.
He said another way to bail out the iron ore miners of the current situation was to abolish the service tax currently levied on mining the mineral. “If this is done it would also provide a reprieve to us,” he pointed out.
The miners are believed to have already exported around 25 million tonnes of iron ore so far and were expected to export around 100 MT this year.
“As if this rupee appreciation was not enough, the Railways has increased the freight fares by 11%, which has further compounded our problems,” Baldota said, adding that increased fares would further deplete the coffers of the iron ore miners.
The FIMI chief pointed out that the Railways was earning heavy revenue by repeatedly increasing the freight fares for iron ore.
But the steel industry was not impressed by FIMI’s assertion on sustaining losses, with the Indian Steel Alliance (ISA) arguing that rising iron ore prices, both in domestic market and internationally, would definitely offset their losses.
“The ISA feels that there has been tremendous appreciation of the prices of iron ore both domestically and globally. Rupee appreciation may be absorbed by them (miners) in that case,” ISA president Moosa Raza said.
The steel industry and miners are at loggerheads on the issue of ore export with the former saying that unabated exports of the mineral could seriously jeopardise the massive capacity expansions announced by major steel companies as they needed assured raw material linkages.
On the other hand, minors contended that they were constrained to export iron ore since the domestic steel companies were unable to offtake surplus production.
Much of the ore is shipped to China whose booming infrastructure needs more steel.