Indian government has determined to impose export duty of 30% on iron ore, this policy is a double-edged sword, it will weaken its competition in global iron ore export market on one hand, and quicken domestic pellet production on the other hand.
Exports indicate that due to the insufficient technology of steel industry to make use of fine ore, most of them are exported, which takes up of 60% of iron ore export. However, pellet which is made from fine ore can be further used by steel industry in India domestic. Fine ore export has fell to the condition of years ago, which may stimulate the production of pellet in mining companies. On May 27, IDCO has been approved to construct a pellet plant.
Fine ore Pellet
Indian government has risen ore export duty twice since year 2011 to meet domestic requirement of iron ore and restrain export. But in a way this decision may make things go contrary to its wishes considering a global price drop of over 30% in July. Besides, the exclusive ore export duty as well as the new price mechanism established by government own company NMDC shrank the profit of mining companies.
