×
Home Companies Industry Politics Money Opinion LoungeMultimedia Science Education Sports TechnologyConsumerSpecialsMint on Sunday
×

Union Budget 2008 | Steel Ministry proposes ad valorem export duty on chrome ore

Union Budget 2008 | Steel Ministry proposes ad valorem export duty on chrome ore
PTI
Comment E-mail Print Share
First Published: Sun, Feb 24 2008. 04 46 PM IST
Updated: Sun, Feb 24 2008. 04 46 PM IST
New Delhi: Fearing fast depletion of chrome ore due to phenomenal increase in exports, the Steel Ministry has recommended that customs duty on chrome ore be made on ad valorem basis of 15-20% in the coming Budget.
“We are seeing that exports of chrome ore have risen by about 100% due to its increasing demand in the international market and as such there is an urgent need to conserve and that is why we have proposed ad valorem customs duty on the mineral,” said Steel Ministry.
The ministry’s move comes amid serious concerns expressed by the Indian stainless steel manufacturers, who in a recent letter to it pointed out that India only has one per cent of the global chrome ore reserves.
“We are fast depleting the important mineral by mining around 3.3 million tonnes (MT) each year and exporting nearly half the quantity,” the Indian Stainless Steel Development Association (ISSDA)observed in the letter.
Pointing out that the domestic demand for chrome ore is likely to be double from the current level owing to both greenfield and brownfield expansions, the ISSDA demanded that the government should introduce an ad valorem export duty of 20-25% in the coming Budget.
It said during the time of the last Budget, the export price of chrome ore in the international market was $200 per tonne which has now doubled to $400 per tonne.
The Association also demanded that chrome ore exports be stopped within two years from the current level of 3 lakh tonnes besides increasing the percentage of beneficiation from 38% to 40%.
“All exports of chrome ore and its concentrates are to be routed through MMTC, including some mine owners who have got 100% ‘Export Oriented Units´ status in the last one or two years,“ the Association said in its letter.
It said around 90% of India’s total chrome ore exports find their way to China where it is value-added. By continuing to export around 1.35 MT per annum, India is not only rapidly exhausting its limited reserves but also losing a huge economic opportunity of promoting investments, industrialisation and job creation within its own boundaries.
In another significant pre-budget recommendation, the ministry proposed a 10-15% ad valorem duty on export prices of iron ore.
“The current duties have had no impact as iron ore exports continue to grow with rising prices,” said a steel ministry official who did not want to be identified.
“The tax payable under the new duty structure will change with fluctuating prices.”
Last year, the government introduced ore-grade specific duties of Rs50-300 a tonne to prevent exports, but iron ore prices have shot up by more than 50% in the past 12 months.
The country has 25 billion tonnes of iron ore of which only 18 billion is mineable, steelmakers argue and cite that the remaining reserves are cannot be mined as they are in the ecologically fragile zones.
Steel Minister Ram Vilas Paswan has been voicing his concern on the continued exports of iron ore saying that the needs of the domestic industry should be met first and then it should be exported.
Even during the Inter-Ministerial Group meetings, the steelmakers have made it clear that unless raw material security was ensured the massive capacity-expansions announced by the steel producers could be jeopardised.
Comment E-mail Print Share
First Published: Sun, Feb 24 2008. 04 46 PM IST
More Topics: Union Budget 2008 | Chrome | Steel | India | Ad valoram |