Just as things appeared to be looking up for the state's iron ore mining industry, hopes of a turnaround were dashed after Union finance minister Arun Jaitley failed to provide the proverbial silver bullet that mining companies were waiting for. Disappointed that the Union Budget for 2015-16 did not contain a cut in export duty on low grade iron ore, mining companies wasted no time in voicing their disappointment.
"The mining industry is devastated," a high-ranking official in a mining company, said. "It was a promise made by Narendra Modi that if Goa elected two BJP MPs then he would ensure that mining is restarted within two months, but nothing has happened."
Goa Chamber of Commerce and Industry (GCCI) had requested the finance minister to have different export duty rates for different grades of iron ore. Iron ore produced in Goa has an average grade of 54%, which is much lower as compared to that mined in other states and thus trades at a discount. Given its low quality, the iron ore also has no domestic takers.
GCCI had recommended that iron ore with a grade greater than 62% should attract 10% export duty while iron ore of lower than 62% grade should be exempt from export duty. At present, export duty on iron ore stands at 30%, having been raised from 20% in December 2011.
"It is a lose-lose situation," said the managing director of another large mining company. "Iron ore would have been sold and the state and the country would have got revenue but now the state or the country gets nothing. It is a big disappointment," he added.
Due to the high export duty, nearly nil domestic consumption and the crash in the international iron ore market, the Goan mining industry is struggling to sustain itself, even as it battles the bureaucracy in restarting mining.
"As far as mining is concerned, there were a lot of hopes that there would be some correction in export duty," secretary of Goa Minerals Ore Exporters' Association Glen Kalavampara said. "Unfortunately, we have not seen much in this regard. We hope that maybe in the future there would be some correction, because unless it happens it will reflect on the mining industry, especially in Goa. There was expectation that mining could restart but now resumption of mining could get delayed."
Source: The Times Of India
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