Taking cognizance of Planning Commission’s observation that despite the fact that current reserves of iron-ore in the country may not be sufficient to meet the domestic industry’s demands beyond the next 25 years, India exported 486 million tonnes of raw material worth Rs 1.85 lakh crore during the 11th Plan period, a Parliamentary panel has in a stern observation asked the Government to either completely ban iron-ore export or if possible hike the export duty on it.
Expressing its “anguish” at the fact that the Steel Ministry exported more than one-third (36.9%) of total iron-ore produced in the country during 2011-12, the Parliamentary Standing Committee on Coal and Steel has recommended that Government should either completely ban iron-ore exports or further reduce the existing 30 per cent export duty on it, as doing so would save the valuable raw material for future use of the domestic iron and steel industry.
The Parliamentary panel which is led by Trinamool Congress MP Kalyan Banerjee, has made these observations in its review report on the country’s iron-ore export policy. The panel has presented its report to the Parliament.
In view of the huge exports of iron-ore from the country, the Committee noted in its observations that it “disapproves the present iron-ore export policy of the Government where it was decided that although conservation of iron ore resources is of the paramount importance, the same may not be achieved by banning or capping the export of iron ore but by taking recourse to appropriate fiscal measures”.
It felt that though the Government has claimed that imposition of higher export duty on iron-ore has resulted in lesser export of the precious raw material (the duty was hiked from 20 per cent to 30 per cent in 2011), this will not help in long term conservation of iron-ore as required by steel industries in the country.
By implementing either of the two options suggested by it, the Government would be able to successfully preserve the raw material for a longer period of time, the panel said.
It further noted that the Government should draft a new steel policy (work on which has been going on within the Steel Ministry since quite some time), which should especially aim at conservation of iron ore, particularly of higher quality one for a longer period of time.
The Government in order to encourage optimum usage of iron-ore resources and to improve domestic utilisation of low grade iron-ore and fines through beneficiation and pelletization, had reduced the import duty on plants and equipments used for initial setting up and substantial expansion of beneficiation and pelletization plants, from 7.5 per cent to 2.5 per cent in the General Budget for 2012-13. Besides, export duty on pellets has been reduced to zero.
While appreciating the Steel Ministry for these measures, the panel however has not agreed to the decision of reducing export duty on pellets to zero.
The Committee suggested that imposition of higher export duty on iron-ore fines and non-exemption from export duty to pellets will give an impetus to setting up of pelletisation plants in the country by the stand alone miners. “Setting up of more pelletisation plants will also generate employment opportunities and will also generate more revenue in terms of value added products.”
Focussing on greater requirement of Research and Development activities in the iron-ore mining sector, the panel said in the report that introducing state-of-art technology and scientific approach in the existing iron-ore mines for enhancing the production is essentially required and therefore funds may be allocated towards expansion and exploration of new iron-ore mines in this regard.