NEW DELHI: India will cut an export tax on low-grade iron ore to 10 percent from 30 percent, Finance Minister Arun Jaitley said on Thursday, in a big boost for top exporting state Goa which is close to restarting its mining industry.
Court action against illegal mining has shut the industry in Goa for more than two years, although companies including top miner Vedanta Ltd are starting to get approval to resume work in about a month.
The new export duty will be effective from June 1, Jaitley told the parliament on Thursday. The tax stays at 30 percent for higher grades.
Iron ore prices have almost halved in the past 12 months, and are hovering near their lowest in a decade. This has made Goa’s low-quality ore, which contains less than 58 percent iron, unappealing to traditional buyers in China, who can now buy better grades of the steelmaking raw material at competitive prices.
Goa Mineral Ore Exports Association Secretary Glenn Kalavampara welcomed the move.
“Now the head is slightly above water,” Kalavampara said. “We can at least breath now but prices are still a concern.”
Goa is unlikely to be able to start exports before October at the earliest pending some approvals and as the four-month monsoon season begins in June, an official with a mining company in Goa said.
The state has about 8 million tonnes of ore waiting at ports without buyers due to the 30 percent duty.
Goa exported about 50 million tonnes of iron ore a year before the mining ban was imposed in 2012. The Supreme Court of India has imposed an interim output limit of 20 million tonnes.
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