India's iron ore exports dip, steel firms seek cap | Reuters.com

India's iron ore exports dip, steel firms seek cap | Reuters.com:

"India's iron ore industry said on Friday that a duty on exports imposed in February and a strong rupee had dragged down sales, but steelmakers disagreed and again sought a cap on overseas shipments.

The government initially set an export duty of 300 rupees per tonne of all iron ores, but later cut the rate applicable to low-grade sales to 50 rupees following protests by the mining industry."

Cost of protectionism

Mint reports

The imposition of export duty of Rs300 per tonne in the recently submitted Union Budget is threatening to put Goa’s barge owners out of business.
Barge owners in the coastal state transport iron ore to ships waiting at Mormugao port that then feed the hungry steel mills in China.
In just 15 days since the duty was announced, the number of trips made by barges has dwindled. From 10-15 trips in a fortnight, it has come down to four to five, according to Atul V. Jadhav, managing director, New Era Shipping Ltd and president of the Goa Barge Owners Association. “Very soon, we will be out of business,” Jadhav says.
Goa exports about 36 million tonnes of iron ore out of India’s total ore exports of 100 million tonnes. The barge owners are paid Rs59 per tonne per trip, by ore exporters such as Sesa Goa, Chowgule, Dempo and Timblo as per an agreement between the Goa Barge Owners Association and the Goa Mineral Ore Exporters Association.

We are so used to read stories about how people lose jobs because an inefficient business is allowed to close, or when consumers are allowed to buy cheaper imports. But we hardly get to read about opportunities lost because of government restrictions.

Steel industry seeks cap on export of iron ore

BS reports

The steel industry today demanded that the government place a quantitative restriction on iron ore export at 90 million tonnes for the current year, in a move to keep more raw material at home.

“Iron ore export needs to be limited because there is a shortage in the supply of iron ore to the domestic steel industry,” Moosa Raza, president, Indian Steel Alliance, said at a press conference organised by industry body Assocham.

The industry has also asked for a 15 per cent reduction in the cap on iron ore export every year until the exports are brought down to zero per cent. India currently exports close to 100 million tonne iron ore, mostly to China.

Restricting exports is a long standing demand of the steel industry which feels that iron ore needs to be preserved to meet the capacity expansion plans of the indigenous steel sector.