India: Export duty hike could cast a shadow on Odisha mine block auctions

-By Meera Mohanty

The Odisha government is considering postponing the auction of four iron and manganese blocks, considering the changed sentiments after the Union Government's decision to raise export duty on iron ore to 50%. A final decision will be taken on Monday, 6 June, according to those in the know.

Export duty on iron ore was raised to 50%, amongst a bunch of decisions taken by the government a couple of weeks back purportedly to tackle the rising inflation.

Odisha, which accounts for most of India's iron ore exports, had called for bids for these four blocks, including Koira which was earlier mined by Aditya Birla Group's Essel Mining. The qualified bidders were to be announced in a few days before the forward auction took place, on alternate days beginning 9 June 2022. About 16 companies bid for three of the deposits and barely any interest was shown in Kusumdihi, a manganese and iron ore block.

List of mines put up for auction

Speaking on condition of anonymity, an official blamed the stamp duty for the lease as the likely deterrent. Stamp duty, based on the value of the land, could be a huge financial burden in cases such as Kusumdihi where the area, for which stamp duty was being paid, had relatively less exploitable resources.

Odisha earned about INR 49,000 crore in mineral taxes last fiscal. It would not want to settle for tepid premiums that could affect its long term earnings from mining.