NEW DELHI: India’s finance minister P Chidambaram said on 16 March, 2007 that he would consider all the facts before reviewing an export duty on iron ore introduced in the Union Budget last month.
A duty of Rs300 per tonne across all grades was imposed on ore exports in the Budget, and industry officials said low-grade ores would be hit particularly hard due to lower prices. As a result, a number of iron ore-exporting firms have appealed for a rollback.
“While the steel industry has supported the export duty, the iron-ore exporters have pleaded for a reconsideration of duty on iron ore fines,” Chidambaram said.
“We shall consider all the facts and circumstances objectively and take suitable decisions,” the finance minister added.
India, the number three supplier of iron ore to China after Australia and Brazil, announced the export duty change in a move to keep more of the minerals for domestic steel mills.
In financial year 2006-07, India’s exports of iron ore are estimated at about 90mt. More than half of these sales are made to China.
Chinese buyers have diverted more than 20 iron ore-carrying vessels away from India following the new tax, which came into effect on 1 March.
It came at a time when Chinese steel mills were ramping up imports ahead of April when a 2007 price rise of 9.5% takes effect and due to strong steel demand at home and abroad.
Indian steel makers have been calling for a ban on iron ore exports to preserve the raw material for domestic steel firms.
However, ore industry officials say Indian steel makers do not have sufficient processing capacity to use low and medium grade iron ore that constitutes the bulk of exports.