The Indian government is working toward the imposition of a 30 percent export tax on low grade iron ore by October this year, government sources said on Wednesday, September 10.
This aims to promote domestic value addition to low grade iron ore and increase supplies to local steel mills, the sources said.
Currently, low-grade fines and lumps do not attract any export duty, while overseas sales of high-grade lumps and fines attract a levy of 30 percent.
While steelmakers welcome the proposal, miners represented by the Federation of Indian Mineral Industries (FIMI) plan to argue that India already has a surplus, of 14 million mt, rising up to 35 million next year, of low-grade ore, and that an export tax would reduce opportunities to dispose of the higher volumes.
Miners have also pointed out that a blanket duty could create stockpiles, cut state royalty revenues and trigger trade disputes. Some recommend a rules-based, flexible duty system with exemptions for certain grades and periodic reviews.
