Indian steel producers Tata Steel and ArcelorMittal Nippon Steel Limited (AMNS) have petitioned the Indian government seeking liberalization of chrome ore export rules and a waiver of the import duty on steam coal, government officials said, citing communications made to the government on Friday, August 5.
Tata Steel has sought the scrapping of the system of canalizing chrome ore exports through government-owned trading firm MMTC Limited.
Under the canalization system, chrome ore miners like Tata Steel commit supplies against tenders floated by trading firm MMTC Limited and the latter is responsible for sales of the commodity overseas.
Seeking the freeing of chrome ore exports from the country, Tata Steel’s communications to the Indian commerce and steel ministries pointed out that MMTC Limited has been failing to maintain minimum dispatches owing to financial distress as it has been declared a non-performing asset (NPA) by its bankers.
The company said that its subsidiary, Tata Steel Mining Limited (TSML), had acquired three chrome ore mines - Sukinda, Saraibil and Kammarda - through the auction route with rules mandating that the mining company dispatch 1.6 million mt per year to the trading firm, failing which penalties would be levied.
Tata Steel said that MMTC had floated export tenders in June but cancelled them subsequently, and materials were lying at ports and further dispatches from the mines could not be continued owing to the acute storage shortage at the ports.
Under these circumstances it is very difficult for mines to adhere to the minimum dispatch of material to the trading firm and mines were liable for penalties. Tata Steel has hence sought the removal of chrome ore from the canalized list so that miners are able to freely export without hindrance and the risks of facing penalties for non-supplies to MMTC.
AMNS has in turn sought a waiver of customs duty on imported steam coal used in Corex blast furnaces. The company has pointed out that currently a zero rate of import duty is applicable on anthracite, pulverised coal and coking coal, while imported steam coal is subject to a 10 percent levy.
