So, there is no choice for us but to increase imports," Vinod Nowal, deputy managing director of JSW Steel, told Business Standard.
According to Nowal
, the landed cost of iron ore sold through e-auctions is around Rs 5,600 a tonne against imported ore, which costs Rs 6,300 a tonne after adding inland cost and freight (CFR).
"Though imported ore costs slightly higher than the domestic ore, considering the good quality of imported ore, we are importing.
Our strategy is very clear.
We want to first use local material and then look at imports," he
Base prices of iron ore at e-auctions in Karnataka have gone up 41 per cent to Rs 3,800 a tonne from Rs 2,700 a tonne about three years ago.
Besides, steel mills also have to pay 27 per cent taxes in the form of 15 per cent royalty and 12 per cent forest development tax and five per cent value-added tax.
This has dented their margins considerably, Nowal
Blast furnace life will also increase with imported ore. So, even though the imported ore costs around Rs 1,000 higher than domestic material, we find it useful," Nowal