The proposal has been sent to the finance ministry after an inter-ministerial consultation with the mines and environment ministries. At present, the export duty on iron ore lumps is 15 per cent and it is 5 per cent on iron ore fines.

Steel Minister Virbhadra Singh has already asked the finance minister to increase the export duty on both lumps and fines to 20 per cent. “We are also looking at various options, like a graded system of duty, where different bands of specific duties would be fixed depending on the prices. It can start from zero and the upper limit could be determined on the basis of prices,” said a senior official from the steel ministry.

The official also said the government would introduce eligibility criteria for exporters and companies engaged in iron ore exports. Only the exporters or companies that comply with mining and environment norms would be allowed to export. Such a move would help check illegal mining and maintain the mineral reserves of the country. This would also help in financial closure of those companies which are making capital investment. Thus, more projects for value addition would come up.

The steel minister had earlier said the government might resort to taxation measures and quantitative restrictions to check and conserve the use of iron ore in a phased manner.

Imposition of 20 per cent duty on iron ore lumps and fines would also ensure an extra revenue of Rs 15,000 crore to the exchequer, said an Assocham report.

Sourced from www.business-standard.com