Sponge iron makers have urged the government to impose a 30% export duty on pellets, an improvised version of iron ore, which attracts zero duty currently. Both iron ore fines and lumps having 58% and above iron content attract 30% export duty now.

“We request you to kindly consider our proposal for levy of 30% export duty on iron ore pellets and ban all exports above 63% Fe to safeguard the domestic steel producers especially the secondary steel producers having no captive iron ore mine,” Chhattisgarh Sponge Iron Manufacturers’ Association has written to Prime Minister Narendra Modi.

India exported 12.6 million tonnes (MT) pellets in 2019-20, up from 9.3 MT a year ago. Sponge iron makers use pellets as their raw material. India is the world’s largest producer of sponge iron, a substitute of scrap, used in the production of billets, blooms and other semi-finished products. India’s sponge iron production rose to 37.14 MT in 2019-20 from 22.43 MT in 2015-16. Restricting exports of iron ore pellets would help in bringing down the steel prices in the country at affordable levels which in turn will help in increasing consumption of steel.