India Iron Ore Exports Fall 11 Per Cent As Duty Takes Its Toll

India’s iron ore exports fell by 11 per cent in December as export duties imposed during the month took their toll. Chinese importers instead bought from Brazil and Australia.

According to data compiled by the Federation of Indian Mineral Industries, exports fell to 12.37 million tonnes (mt) in December 2009 compared to 13.85 mt in December 2008.

FIMI attributes the fall to the Indian government’s decision to levy an ad valorem export duty of 5 per cent on fines and 10 per cent on lumps, effective December 24, 2009 and the federation fears that exports will fall to ‘nil’ if the government increases the duty to 20 per cent. FIMI has urged the government to withdraw the export duty as domestic steel mills cannot fully use lumps hence there is a need for export.

For the current financial year FIMI estimated iron ore exports to be in the range of 104-106 mt. Total exports for the first nine months (April-December), recorded a rise of 15.15 per cent to 76.54 mt, against 66.47 mt in the comparable period last year.