Metals & Mining Sector

Metals & Mining: Neutral
 
Budget Proposals

* Rate of Export Duty for all types of iron ore enhanced and unified at 20 per cent ad valorem.
* Full exemption from Export Duty to iron ore pellets.

Budget Impact

The increase of export duty on export of iron ore to ad valorem 20 per cent on lumps as well as fines is not positives for the iron ore exporting companies. Currently, lumps are taxed at 15 per cent and fines are taxed at 5 per cent. The companies which will essentially be negatively impacted by this are iron ore exporters such as Sesa Goa, and NMDC that derive majority of their revenue from iron ore exports. However, there might be some respite for those steel companies that do not have captive iron ore mines. Nonetheless, no imposition of a mining tax is a positive for the mining companies as well as steel companies with captive mines.