India May Raise Iron Ore Export Duty to 20 Pct

In an attempt to keep steel prices from rising further, the Indian government may raise export duty on iron ore, the Economic Times reported Wednesday.

India's Committee of Secretaries (CoS) reviewing prices of essential commodities is set to discuss a proposal to raise export duty on iron ore to 20 percent from 15 percent.

The move is aimed at improving domestic supply of iron ore, particularly high-grade lumps.

The Steel Ministry has made a strong case, raising export duty on iron ore to conserve the mineral for value addition within the country. After the meeting between Steel Ministry officials and the Mines Ministry on the issue, it would now be discussed by the CoS for final approval, an official source said.

Iron ore export attracts 15 percent duty. The duty was imposed in June as part of the government exercise to tame steel prices. Increasing export duty on iron ore to 20 percent would provide the government 26 billion rupees, or 0.6 billion U.S. dollars as additional revenue.

The iron ore consumption during 2007-08 was 85 million tons in India, of which 41 million tons were lumps and 44 million tons fines. Of the estimated exports of 93 million tons during the period, 12.7 million tons were lumps, the report said.