The recent increase in ad valorem export duty on iron ore to 15 per cent could have cascading negative multiplier effects on Goan economy in general and the mining industry in particular besides causing various social problems, if no respite is given to state’s mining industry, which exports low grade iron ore.
Disclosing this to the reporters at a press conference on Monday evening, the president of Goa Mineral Ore Exporters’ Association, Mr Shivanand Salgaocar said that if the export duty was not withdrawn then it would make the exports economically unviable forcing iron ore producers to reduce or stop production and exports of low grades, leading to various social and economic problems.
He further said that miners would have to store low grade ore at various sites in the state which could lead to environmental issues also, adding that most of Goa’s ore was of lower grade and that it does not have any demand in the domestic market.
The Centre should immediately withdraw the duty and help the mining industry in the state he said.
Mr Salgaocar also said that Goan mining industry has invested heavily in facilities for beneficiation (mineral dressing process) technologies to upgrade the domestic ore deposits for export, which other would not have had any market. He also said that only in recent years there was demand for low-grade ore especially in China, which otherwise remained unconsumed.
Stating that the increase in export duty was aimed at conserving natural resources and making available the ore to Indian steel industry, he went on to add that domestic steel industry mainly used high grade lumps and fines, that were not mined in Goa and as such Goan ore had no domestic market and the only option before the miners was to export the product.
The Centre’s initiatives at conservation were meaningless as far as Goa was concerned,he added.
He said that mining industry has already been hit hard by increase in the cost of production and handling and transportation of iron ore, due to increase in fuel costs, steep increase in logistic costs and spiraling inflation. He also said that there was already an impending hike in royalty, due to be announced shortly and that the hike in export duty was unwarranted.
The GMOEA president also said that any effort to curb export of iron ore without matching domestic consumption for the ore currently produced would severely affect the industry and employment and economic activity dependent on it. He also said that increased duty would make export of lower grade of iron ore unviable.
The chairman of Dempo group of companies, Mr Shrinivas Dempo, who was also present on the occasion, said that the Goa mining industry was ready to provide iron ore to the domestic steel industry, as country’s needs came first but lamented that there were no takers for Goa’s low grade iron ore. He also said that all domestic steel plants had their own captive mines to meet their ore requirements.
The managing director of Sesa Goa Ltd wondered why the iron ore industry was being singled out for taxation and burdened with additional duty every now and then. He also said that regulatory atmosphere could create problems for the mining industry, which had toiled to enter into long contracts to ensure exports of otherwise rejected ore.
Later replying to a question on the recent agitations against the mining firms, the GMOEA president said that established players in the mining field were carrying out their corporate social responsibilities well and working towards the welfare of the people along with their business activity. He, however, lamented that the traders were involved in wrong-doings and were responsible for various problems.
In reply to another question on how many people could be affected due to increase in export duty, he said that about 10 per cent of Goa’s population could be affected. He further said that 12,000 people were directly employed in the industry while 30,000 others were indirectly employed in it. Besides, a large number were also employed in ancillary units.
Source: Navhind Times
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