Indian Miner Vedanta Seeks Cut in Iron Ore Export Duty, Levies
Press release - Indian miner Vedanta's iron ore chief on Friday called for a cut in federal and state levies on exports of low-grade ore mined in Goa, as the company struggles to remain competitive amid a global commodities slump.
The country's biggest private miner resumed mining in Goa, India's top-producing state, in August after a ban on illegal extraction shuttered operations for three years.
Vedanta, a unit of metals tycoon Anil Agarwal's Vedanta Resources, hopes to export more than 5.5 million tonnes of iron ore from Goa in the financial year to March 2016. It recently shipped 88,000 tonnes, bought at state auctions, to its biggest customer China.
The company will export another 80,000 tonne cargo of the steel-making ingredient to China within days but is struggling to sell elsewhere as iron ore prices have slumped and supplies of higher-quality ore are abundant .
"We have to be also mindful that a substantial push in cost is taxes," Kishore Kumar, head of Vedanta's iron ore business. "Export duty on low-grade Goan ore must be reduced to zero, while the high grade should be at par with state-run firms."
India this month cut the export duty on NMDC's ore exports to Japan and South Korea made via MMTC to 10 percent from 30 percent. Both NMDC and MMTC are state-run firms.
"We are restraining capital, we are restraining our spends. So everything has been put on hold," Kumar added.
The Goa Mineral Ore Exporters Association (GMOEA) estimates ore extraction costs at around $32 per tonne, of which $14 per tonne is made up of levies including a federal export duty of 10 percent.
India's top court banned mining in Goa three years ago, freezing shipments that reached about 50 million tonnes in 2010/11. In lifting the ban it restricted annual output to 20 million tonnes.
(Reporting by Sankalp Phartiyal)