Iran Economy NewsIran moves to impose steep export duty on iron...

Iran moves to impose steep export duty on iron ore

-

Reuters: Iran’s government is negotiating a tax of up to 40 percent on iron ore exports to take advantage of a surge in sales to China, aiming to replace revenue from oil and other sources eroded by sanctions. By Ruby Lian and Silvia Antonioli

SHANGHAI/LONDON, May 21 (Reuters) – Iran’s government is negotiating a tax of up to 40 percent on iron ore exports to take advantage of a surge in sales to China, aiming to replace revenue from oil and other sources eroded by sanctions.

Iran’s iron ore exports to top steel producer China jumped 48 percent in the first quarter from a year ago to a level that would generate annual revenue of about $3 billion at current prices.

The government is now talking with local miners about an export tax, trading and industry sources said.

“A few iron ore cargoes were earlier banned from leaving the port as the government is looking to impose a 40 percent export duty based on free-on-board prices,” said a trader in Shanghai, who imports Iranian iron ore.

The negotiations may lead to agreement on a smaller number than 40 percent to enable miners to absorb the extra costs and continue selling, given fears that the tax could otherwise end up cutting Iran’s exports.

“They are putting the tax in place because the government wants to get a share of the profit. Forty percent is outrageous, but I think eventually they will come down to a more reasonable number,” a spokesman for the Iran Iron Ore association said.

Several attempts to contact the Iranian ministry of industries, mines and trade were unsuccessful.

Iran’s revenue from exports of oil and other goods has decreased since the United States and the European Union imposed trade sanctions in an effort to pressure Tehran about its disputed nuclear programme. The sanctions have also cut the number of its potential customers for iron ore.

As for China, traders do not expect the duty to be much of an issue in a buyer’s market. Chinese demand for steel has slowed recently, which has knocked iron ore prices to their weakest in almost six months.

Iran has grown in importance to become China’s fourth-largest supplier largely because India, formerly a major supplier, has constrained exports in an effort to crack down on illegal mining.

Iran exported 5.68 million tonnes of iron ore to China in the first quarter, but that still amounted to only 3 percent of China’s total iron ore imports.

By comparison, China took in 89.8 million tonnes in the first quarter from Australia, its top iron ore supplier, up 8 percent on the year..

“The heavy duty would have a much bigger impact on Iran’s own export business, while China should not be affected too much,” a second iron ore trader in Shanghai said. (Additional reporting by Marcus George in Dubai; editing by Veronica Brown and Jane Baird)

Latest news

Iran’s Government Auctions Everything, Now This Bad Fortune Has Hit the Country’s Palms

The Iranian government is auctioning everything from the country’s resources and wealth, and the latest news is that they...

Iran Is Thirsty As People Protest

The hollow promises of the Iranian regime to the people are no longer effective. These days there is a...

Special Industries of Iran’s Government Are Drying Up the Country

Iran’s environmentalists and government experts know one of the reasons which they say is responsible for the water shortage...

Oil Bartering Reveals the Real Situation of Iran’s Government

According to economic observers, the Iranian regime's economy is facing impasses from any directions, on the one hand, the...

Western Officials in Shock Over the Illegal Execution of a Juvenile Offender in Iran

On November 24, Iranian prisoner Arman Abdolali was executed despite an international campaign to save his life as he...

Increasing Stagflation in Iran’s Brokerage Government

Iran's economy has been on a death road for years due to widespread government interference. An economy that due...

Must read

Bolton: US Will Continue to Ramp up Pressure on Iran

By Jubin Katiraie The United States will continue to...

Bush extends Iran sanctions

AFP: President George W. Bush on Tuesday extended for...

You might also likeRELATED
Recommended to you