Mining companies based in Goa and mining stakeholders have demanded that the Union government eliminate the exports duty on iron ore, calling the duty an "economic barrier" in the face of falling global prices.

Since September 2012, there were no iron ore shipments from the state except e-auctioned iron ore. Mining companies said that with a 30 percent tax on exports, it makes it even more difficult to sell to a world market where prices have sunk 40 percent this year.

Tom Albanese, chief executive, Vedanta Resources, stated "There is an urgent need to eliminate the export duty, which represents an economic barrier to mining in the current low price environment for low grade iron ore fines".

Mining companies are hoping to restart extraction of iron ore in Goa early next year after a decision by the Supreme Court in April 2014 to lift a 19 months mining ban in the state aimed at weeding out illegal miners. But, with global iron ore prices sliding, it makes more sense for miners to sell to local steelmakers than export.

Mining curbs have also forced some Indian steel producers to import iron ore. Mining companies claim that the iron ore produced in Goa is of little use to Indian steelmakers, many of whom lack the sophisticated plants needed to process the low-grade material.

"Amidst low export revenue and high taxes within the country, it is very difficult for these miners to sustain operational profits," said Prakash Duvvuri, head of research at Indian consultancy ore team.

Mining belt panchayats and various mining dependents from Goa have also urged the Union finance minister Arun Jaitley to abolish the 30% export duty on iron ore. The demand comes as iron ore prices have plummeted to a 5-year low raising concerns over the viability of mining in the state of Goa.

Last week, the Goa cabinet had approved the mining leases renewal policy and chief minister Manohar Parrikar had assured that lease allotment will take place by October 15. Mining dependents in Goa, however, remain fearful as there seems to be a lot of hurdles before mining could actually resume in the state.

Mining companies are hoping to restart extraction of iron ore in Goa early next year after a decision by the Supreme Court in April 2014 to lift a 19 months mining ban.

Source:- timesofindia.indiatimes.com