Higher export duty leaves 149MT of iron idle in mines

New Delhi: A 149 million tonnes stockpile of iron ore is lying idle at mines in the country due to the high-export duty imposed by Centre, mining body Federation of Indian Mineral Industries (FIMI) said on Monday.

“Subsequently owing to imposition of export duty and sequential increase which is now 30 per cent on plus 58 per cent iron, its exports have been adversely affected. There is huge stockpiles of iron ore to the tune of 149 million tonnes lying in the mines mostly in Odisha and Jharkhand,” said  FIMI president Sanjay Pattnaik.

He said that the federation has urged the government for the removal of export duty on iron ore above 58 per cent iron, which will give boost to the exports and will facilitate liquidation of the huge stockpile.

During the year 2015-16, exports of iron ore have come down to abysmal level of 4.5 million tonnes. “However during the year 2016-17, the exports of iron ore have witnessed increase to the extent of 30 million tonnes  which has been mainly on account of exports through MMTC where concessional export duty at 10 per cent is charged as well as exports of low grade iron ore from Goa on which the export duty was abolished during the budget 2016-17,” he said.

FIMI said the miners are facing problems as both the domestic and export demand is muted.

“Service Tax at the rate of 15 per cent on royalty paid on minerals was introduced with effect from 1st April, 2016 which has now been enhanced to 18 percent under  GST regime. This will be additional burden particularly for the non-captive mines where the input credit may not be available,” said Mr Pattnaik.