India looking at scrapping 30% iron ore export duty. Could bring 100 million tonnes back onto market
Reuters reports India's minister in charge of mining Dinsha Patel told an industry gathering on Wednesday that the duty on iron ore exports is under "active" review.
The export surcharge was raised on two occasions last year in an effort to keep ore inside the country for local steelmakers amid a mining ban in the state of Karnataka instated in July. That ban is now being lifted. Karnataka represents roughly 25% of the country's production.
The customs duty is pegged at a crippling 30% and is the number one reason India's iron ore exports dropped from 100 million tonnes in 2010 to around 40 million tonnes this fiscal year. The global seaborne iron ore trade handles about a billion tonnes per annum.
The country produces some 200 million tonnes or iron ore per annum, but much of it is low grade,which have led to trade spats with China in the past, where almost all of the export ore goes.
The spot price of 62% iron ore imported into the port city Tianjin in northern China on Wednesday was $135.10 a tonne. The price of the commodity has declined more than 8% over the last quarter as demand from top consumer China weakens. Benchmark Tianjin 62% ore averaged a record $168 during 2011.
Lower grade 58% fines was changing hands at $120.90 on Wednesday, down from $125 at the start of the year according to Steel Index data.
Human Rights Watch said in a report released in June that India’s "deep-rooted shortcomings in the design and implementation of key policies have effectively left mine operators to supervise themselves."
The report describes "pervasive lawlessness in India’s scandal-ridden mining industry" and the collapse in enforcement of laws to protect local communities.