- The Induian Railways has slashed the cost of transporting iron ore for exports for the first time since March 2012 by levying a flat distance-based charge across all slabs in response to “significant changes in the market”.
- The new distance-based charge has been set at a uniform Rs 300 for all slabs and will be effective from September 8 for iron ore exported for production of iron and steel and cement, the Railway Board said in a circular.
- The revision comes as the domestic mining sector struggles to get back on its feet after a three-year lull amid a steep fall in commodity prices over the past few months.
- Between 2012 and 2015, India’s exports of iron ore plunged by over 80% to a few million tonnes from 90 million tonnes. In May this year, the export duty on low-grade ore with 58% iron content was cut to 10%, while the rate was maintained at 30% for higher grades.
- Prices of Goan grades of ore have crashed to $40 now from a peak of $140 in 2012, when the Supreme Court imposed a ban on illegal mining.
- The initiative is aimed at reviving exports, but we do not expect any big impact due to a crash in global prices, the existing export duty and high logistics costs.