The Indian government is preparing to introduce a 30 percent export tax on low-grade iron ore fines by October this year, aiming to promote domestic value addition and ensure higher availability of raw material for local steel mills. Currently, high-grade iron ore with Fe content above 62 percent attracts a 30 percent duty, while low-grade ores are exported duty-free.
Miners raise concerns over export duty impact
The Goa Mineral Ore Exporters’ Association (GMOEA) has voiced serious concerns about the proposed duty, emphasizing that Goa’s iron ore reserves are predominantly low-grade and lack domestic demand. GMOEA warned that the new tax could disrupt mining operations in Goa, cause large-scale stockpiling and wastage, and threaten livelihoods and regional economic stability.
The association also highlighted that India already faces an accumulation of 180 million mt of low-grade iron ore, creating both economic and environmental challenges.
FIMI calls for no duty on low-grade iron ore
The Federation of Indian Mineral Industries (FIMI) stressed that there is virtually no domestic demand for low-grade iron ore, as Indian steel producers only consume higher-grade ores. In its formal appeal, FIMI argued that imposing an export tax would hinder utilisation and monetisation of low-grade ore, exacerbate environmental risks due to waste dumps, and reduce employment in mining-dependent regions
FIMI also noted that nearly 70-75 percent of mined low-grade material remains stranded at pitheads or stockyards, causing environmental degradation and inefficiencies.
Steel producers support government’s plan
On the other hand, major steel producers including ArcelorMittal Nippon Steel (AMNS), JSW Steel and Jindal Steel have supported the government’s plan. They believe that ensuring cheaper domestic iron ore supplies would:
- strengthen India’s raw material security
- allow the country to export up to 50 million mt of finished steel in the near future
- enhance competitiveness in global markets by keeping steel export prices low
At a recent inter-ministerial meeting, steelmakers even suggested supplying iron ore at half the current price to the local industry, helping sustain competitiveness amid changing tariff regimes and global trade challenges.