India Iron Ore update

India could partially roll back its 20% export duty on iron ore fines for low-grade material, said industry insiders at MB's China Iron Ore conference in Beijing.

"Representation has been made to the government to reduce the export duty," said SK Mukherjee, ceo at Sesa Goa.

"An export tax of 20% is a very high level and it might put some exporters out of business, particularly the higher-cost exporters. They are feeling the pressure," he said.

India raised the export tax for iron ore to 20% on March 1 from 5% on fines and 15% on lump.
Mukherjee said he was "more or less confident" of a tax reduction, adding that "the export tax is not part of the annual budget so it can be changed at any time".

"The price has come down a lot in a few weeks, and there is potential that some of the exporters may have to stop," he added.

"India, due to its inferior steelmaking technologies, cannot consume lower-grade iron ore. Hopefully, the Indian government will have no choice but to adjust the export duty on lower-grade iron ore in a view to facilitate exports," said a source at another Indian miner.

"[I hear that] India is considering rolling back export duty rates according to different grades, which is reasonable," confirmed a Singapore-based iron ore trader.

Indian may cut the export duty to below 10% for iron ore below 58% Fe, and to 12-13% for 58-62% Fe material, with slight duty reductions for iron ore above 62% Fe, he said.

Other Indian miners and traders agreed that chances were high that India cut the export duty for lower-grade iron ore, but felt that any duty reduction would be limited.