MoF maintains raw iron ore export tax

Illustrative photo (Source: baocongthuong.com.vn)

Hanoi (VNA) – Because the
export price of refined iron ore is 200 times more expensive than that of raw
iron ore, reducing the export tax on raw iron ore is unreasonable and will
discourage investments in ore sorting technology, the Ministry of Finance (MoF)
has concluded.

Due
to the decreasing domestic demand for iron ore, domestic iron mines have a surplus
inventory. Therefore, the Ministry of Industry and Trade (MoIT) proposed the
Prime Minister to allow the export of iron ore inventory, limonite iron and
magnetite iron ore to remove difficulties for enterprises.

The
exports will last until the end of 2017.

The
MoIT also proposed the reduction of export taxes on high quality iron ore, if
this product is allowed to be exported.

The
MoF said that the export tax on iron ore and refined iron ore is 40 percent -
equal to the ceiling rate set by the National Assembly.

In
order to encourage enterprises to invest in high-grade iron ore production, the
MoF proposed a detailed plan for specific tariff for processed iron ore, with
export tariffs lower than 40 percent.

The
high export tax rates on raw or simple mineral resources is designed to limit
the export of mineral resources.

The
total capacity of licensed iron ore mines is about 13 million tonnes per year,
reported the MoIT. Domestic blast furnaces are mostly small in size and large
in fuel consumption, leading to inefficient operation. Therefore, they have
stopped production or are operating under capacity.

The
efficient blast furnaces have a combined capacity of 2.6 million tonnes of
steel per year, using about 4.6 million tonnes of iron ore per year.

Iron
ore is mainly exploited in the northern mountainous areas, with difficult
exploitation conditions, high transport costs and low ore quality, leading to
high production costs.

When
the global price of iron ore fell sharply last year, Hoa Phat Steel Joint Stock
Company shifted to using imported ore with a volume of over one million tonne
instead of using domestic iron ore.-VNA



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