Import duty cut on coal

Import duty cut on coal
04 March 2004


The Indian government’s move to slash import duty on coal to arrest spiralling steel prices has an unintended beneficiary: the cement industry. Larsen & Toubro and Gujarat Ambuja Cements, two of the larger cement producers with shore-based facilities which rely on imported coal, are set to witness a reduction in manufacturing costs, especially at a time when international coal prices have hit a five-year high. Late last week, the Union finance ministry issued notifications for reducing customs duty on non-coking coal from 15 per cent to 5 per cent.

Gujarat Ambuja Cements, the fourth largest cement maker, imports around 0.5Mta, while L&T, the largest player, imports around 0.75Mta. "We expect our coal costs to be lower by around 15 per cent. This would be a welcome relief at a time when freight costs have shot up substantially and coal prices are at a record high," said GACL’s executive director Anil Singhvi. International coal prices are currently ruling at a five year-high at $39 per tonne. Freight charges have risen by around 30 per cent during the last six months.

Published under Cement News