Iron ore export to Japan to continue despite withdrawal of duty waiver: NMDC chief

Iron ore provide agreements with Korea and Japan have been in existence for round six a long time; these bought renewed uninterruptedly as New Delhi’s goodwill gesture to the 2 Asian nations.

Whilst the federal government selected to not renew decades-old long-term agreements (LTAs) for supplying iron ore to Japanese metal mills and South Korean main Posco upon their March expiry, state-run miner NMDC, which used to produce the ore, mentioned it might proceed to export to Japan supplied it proved to be economically viable.

“For the present fiscal, the federal government is not going to be offering export responsibility aid it was offering earlier. However there isn’t a bar on us to export iron ore. The one factor is that we’ve to pay 30% export responsibility like others and never 10% as earlier. We’re certainly in search of exports,” NMDC’s chairman-cum-managing director Sumit Deb informed FE.

To start out with, NMDC will take a look at Japan as its export vacation spot as a result of it has sure stage of consolation with the Japanese mills. Subsequently, nevertheless, the corporate would additionally take a look at the feasibility of exporting to South Korea and different locations, Deb mentioned.

Iron ore provide agreements with Korea and Japan have been in existence for round six a long time; these bought renewed uninterruptedly as New Delhi’s goodwill gesture to the 2 Asian nations. The union cupboard final renewed the contract on April 25, 2018; the contract was efficient until March 31, 2021.

The federal government didn’t renew LTAs apparently in view of the uncertainty over funding plans of metal mills from these nations in India. Scarcity of the important thing uncooked materials for steel-making in India can also be seen to be a purpose for the choice.

In 2019-20, NMDC exported 2.44 million tonne (MT) iron ore, nevertheless it got here down by round 6% to round 2.3 (MT) in 2020-21. There have been no exports to date within the present fiscal. Nevertheless, for 2020-21, NMDC has set 2-2.5 MT export goal.

NMDC operates mines in Chhattisgarh and Karnataka; however the later doesn’t allow exports in the intervening time. Consequently, NMDC should export from its Chhattisgarh mines.

“There isn’t any downside for us to export from Chhattisgarh. However we’ve took on the monetary viability of the exports and see whether or not it does make sense after paying 30% export responsibility,” Deb mentioned.

NMDC is predicted to supply round 44 MT iron ore within the present fiscal, up from 33.25 MT in 2020-21. The extra manufacturing is ready to return from its Karnataka mines which have been closed for somewhat over three years until February this yr. The mine has an annualised capability of seven MT every year. It has set 42 MT gross sales goal, up from 34.15 MT within the final fiscal.