India: Govt puts chrome ore exports under 'restricted category' with immediate effect

The Ministry of Commerce & Industry under the Government of India, through a recent notification, has put chromium ores and concentrates under "restricted category" with immediate effect.

The categories include:

• Chrome ore lumps containing 47% Cr2O3 and above.
  
  
• Chrome ore lumps containing 40% or more but less than 47% Cr2O3.
  
  
• Chrome ore lumps below 40% Cr2O3
  
  
• Chrome ore friable and concentrates fixes containing 47% Cr2O3 and above.
  
  

Earlier, exports of chrome ore were canalised through government-owned trading platforms like MMTC and State Trading Corporation (STC). Canalisation indicates imports and exports of commodities done through specified government agencies.

Under the new regulation, it is indicated that henceforth there will not be any canalisation of chrome ore exports and the material can be exported by the miners/exporters. However, there will be a check in the form of an export licence to be issued by the Directorate General of Foreign Trade (DGFT).

Reasons for restricting chrome ore exports

Securing domestic supply: Securing domestic supplies is possibly the larger picture behind restricting chrome ore exports. This indicates that the government is ensuring some intervention to ensure there is sufficient material available for domestic use before it can be sold overseas.

Exports see sudden surge: Previously, exports of chrome ore were quite limited, at under 5,000 tonnes. Volumes were at around 2,000 tonnes in 2022 but spurted manifold to 32,000 t in the very first four months of this calendar, with almost the entire amount (31,992 t) going to China. The sudden surge could be a reason behind the government moving in to restrict overseas sales.

Production spurts: Production in calendar 2022 was at 3.49 mnt. However, it has already touched nearly 2 mnt January-May 2023. The possible reason behind the sudden rise in production could be increased output from Tata Steel, in a bid to fulfil government obligations on the same. It may be recalled that Tata Steel had retained the mining rights of the 95.81-mnt Sukinda chrome ore mine in Odisha, by emerging the highest bidder in the auctions in 2020. This surge in production probably led to the sudden increase in exports so far this calendar, making the government move in quickly to stem exports.

Export duty

There is a 30% export duty imposed on exports of chrome ore. It is understood that, under the new regulation, this export duty is being retained.