Staff Correspondent

It was unwarranted: private company official

Representation to be given to Union Government

BELLARY: At a time, when the iron ore sector was gradually recovering from the global melt down, it has suffered another blow with the Union Government deciding to impose five per cent duty on iron ore exports. Bellary district in Karnataka is one of the major iron ore producer and exporter.

“It (increase in export duty) was unwarranted,” said Rahul Baldota, Executive Director of Hospet-based Mineral Sales Private Limited of the Baldota Group, while talking to The Hindu.

According to him, ad valorem royalty on iron ore had been increased and a further imposition of export duty would only make export less competitive.

“The imposition of the increased duty will have to be borne by the exporter himself,” he said.

On an average, around 80 per cent of the ore produced in the district is exported, while the remaining is consumed domestically.

Iron ore, which is abundantly available in Hospet-Sandur and Bellary-Sandur sector in the district, is of high grade quality, and has been in demand domestically and internationally.

Boom

During the boom in the international market, ever since China emerged as a major buyer of ore after 2002, the movement of iron ore, including fines, by road towards Goa, Karwar and Mangalore and towards Chennai and Visakhapatnam ports, went up by at least ten folds and also through rail in about 22 rakes (58 wagons in each rake with the carrying capacity of 3,850 tonnes) towards Goa, Chennai and Visakhapatnam ports.

After the global meltdown in 2008, the iron ore market crashed and the movement of iron ore had come to a stand still.

Later, in mid-2009, although the export of ore gradually picked up, the quantum of ore exported, when compared to the figures that existed prior to the economic recession, had come down drastically.

In 2008-09, the export of ore was around 26 million tonnes, which now stood at 18 million tonnes (up to November 2009).

Added to that, the action by the authorities against illegal mining has brought down production and also transportation of ore.

Several mining companies, which were found to be indulged in illegal mining in contravention of the approved mining plans and facing charges of encroachments, have been ordered to suspend mining activities.

Mr. Baldota said that a representation would be given to the Union Government, through the Federation of Indian Mineral Industry (FIMI), appealing it to reverse the decision in the interest of the industry.

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