Miners seeks exemption from export duty on iron ore

The mining industry has sought an urgent intervention from the Finance Minister to exempt them from paying 30% export duty on iron ore up to 62% Fe grade. This will enable the industry to earn an additional foreign exchange worth Rs 25,000 crore and in turn, the government can earn up to Rs 5,000 crore by way of royalty, district mineral fund, National Mineral Exploration Trust charges and other taxes.

In a memorandum submitted to Finance Minister Nirmala Sitharaman, the mining industry lobby group the Federation of Indian Mineral Industries (FIMI) said iron ore up to 62% Fe is not utilised by the domestic steel mills. Export of such material will help the country earn additional foreign exchange.

“Withdrawal of export duty will facilitate in monetising the non-moving stock and will be a major contribution of revenue in the current sagging economy,” said B K Bhatia, Joint Secretary General, FIMI.

Currently, an estimated stockpile of 162 million tonnes of iron ore is lying at mine heads across the country. Out of this, at least 50 million tonnes could be exported during the current financial year. With the prevailing rates in the international market, the miners can earn about Rs 12,500 crore.

“China has opened up its steel mills and they have started buying iron ore. This is the right time for us to encash. Since there is a stockpile of 162 million tonnes of iron ore available across the country, it would not be a problem for us to export,” a FIMI official said.

Assuming only 50 million tonne of iron ore is exported, the government can look for earning an additional Rs 2,500 crore by way of royalty, contribution to district mineral fund, national mineral exploration trust charges and other state taxes, FIMI official said.

"The mining sector was already under stress and now the challenges arising out of pandemic have brought the mining industry in the country almost to a grinding halt. There is a need to extend required relief for this industry, which is at the heart of infrastructure development," said R K Mishra, Secretary General, FIMI.

The FIMI has also urged the finance minister to defer statutory dues such as mineral royalties, district mineral fund, national mineral exploration trust, transfer charges and other levies, cess imposed by state government for at least 12 months till March 31, 2021. This will give relief to the industry, which is reeling under heavy pressure to pay existing loans and balance payments. With moratorium on statutory payment, mining companies will be able to cope with cost at subdued production level and thereby manufacturing industry will be able to sustain in this tough time, he said.