Business

MoF maintains raw iron ore export tax

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.
MoF maintains raw iron ore export tax ảnh 1Illustrative photo (Source: baocongthuong.com.vn)

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

Dueto the decreasing domestic demand for iron ore, domestic iron mines have a surplusinventory. Therefore, the Ministry of Industry and Trade (MoIT) proposed thePrime Minister to allow the export of iron ore inventory, limonite iron andmagnetite iron ore to remove difficulties for enterprises.

Theexports will last until the end of 2017.

TheMoIT also proposed the reduction of export taxes on high quality iron ore, ifthis product is allowed to be exported.
TheMoF 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.

Inorder to encourage enterprises to invest in high-grade iron ore production, theMoF proposed a detailed plan for specific tariff for processed iron ore, withexport tariffs lower than 40 percent.

Thehigh export tax rates on raw or simple mineral resources is designed to limitthe export of mineral resources.

Thetotal 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 largein fuel consumption, leading to inefficient operation. Therefore, they havestopped production or are operating under capacity.

Theefficient blast furnaces have a combined capacity of 2.6 million tonnes ofsteel per year, using about 4.6 million tonnes of iron ore per year.

Ironore is mainly exploited in the northern mountainous areas, with difficultexploitation conditions, high transport costs and low ore quality, leading tohigh production costs.

Whenthe global price of iron ore fell sharply last year, Hoa Phat Steel Joint StockCompany shifted to using imported ore with a volume of over one million tonneinstead of using domestic iron ore.-VNA

VNA
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