- Removal of tax to help Goan miners struggling amid price slump
- Mines Ministry to propose an increase in copper import tax
India’s Mines Ministry is considering the withdrawal of an export tax of 10 percent on lower-grade iron ore, aimed at helping miners in the western Indian state of Goa to attract customers amid a broad plunge in commodities prices this year.
The ministry will propose removing the duty on fines, or granules, with an iron content of below 58 percent to the Finance Ministry ahead of the federal budget, Mines Secretary Balvinder Kumar said in an interview in New Delhi on Thursday. The ministries will also discuss raising import taxes on copper and aluminum in the budget, which is due around the end of February, he said.
Scrapping the export tax would boost profitability at Vedanta Ltd., which resumed exports from Goa in October after a mining ban was lifted in the state just as global prices slumped due to the economic slowdown in China, the world’s biggest buyer. Chief Executive Officer Tom Albanese told TV channel ET Now earlier this week that the company is seeking the removal of excess taxes, citing “skinny” margins due to weak export prices.
“The proposal is to help the Goan miners, who are saying high costs are making it difficult to find back their export markets,” said Kumar.
Additional shipments from India, once the world’s third-biggest iron ore exporter, would only add pressure to the global market for iron ore, the main feedstock for steel. The government of Goa, previously the biggest shipper of low-grade ore from India, shut its mines in September 2012 after a probe found that mining had contaminated ground water. The ban was lifted last year, with an annual cap of 20 million metric tons on output.
Ore with 62 percent content delivered to Qingdao in China dropped 2 percent to $45.44 a dry ton Thursday, its lowest since July 8 when prices bottomed at $44.59, according to data from Metal Bulletin. China’s import growth is slowing as steel mills cut production, albeit from record levels, in the face of an unprecedented glut of the metal.
India is considering as much as doubling the levy on aluminum imports to counter supplies from China, Kumar said. The news stoked a rally in the shares of domestic producers such as Vedanta, Hindalco Industries Ltd. and National Aluminium Co.