Duties on iron ore fines to remain unchanged; hike aimed at increasing availability of the mineral in the domestic market
Commerce and industry minister Anand Sharma today said that there will be a minor increase in the export duty on iron ore lumps to discourage shipments, though duties on iron ore fines will remain unchanged, reports PTI.
“There will be no increase in the export duty on iron ore fines, but there will be a marginal increase in the export duty on lumps, which we are in agreement (with other ministries),” Mr Sharma told reporters.
Indian steel makers use iron ore lumps to produce steel. Iron ore fines are primarily exported to countries like China.
The duty hike on iron ore lumps will increase availability of this mineral in the domestic market. At present, iron ore is priced in the range of $120-$160 per tonne, up 90% from a year ago, putting input cost pressure on steel companies.
The government at present levies an export duty of 10% on iron ore lumps and 5% on iron ore fines.
Sources said that the export duty on iron ore lumps could go up by another 5%, but government officials would not confirm this.
Last week, senior officials from the steel, mines, commerce and finance ministries discussed the issue of raising the export duty on these different types of iron ore.
Mr Sharma further said mining itself is an industry which is carried out in backward and tribal regions of the country. The industry provides jobs to millions of people.
“So, before taking any decision on increasing export duty, we should take a wholesome view,” he added.
The steel ministry had last month written to prime minister Manmohan Singh and finance minister Pranab Mukherjee, seeking a two-fold hike in the present duty structure. The ministry wants to discourage outward dispatches as it is of the view that the vital raw material for steel making should be retained for domestic consumption.
In 2008-09, iron ore exports amounted to 106 million tonnes, about 85% of which were fines.
Passengers are supposed to get clean and fresh air during a fight. So why is the air we breathe onboard airplanes so bad?
To really understand the quality of air you breathe inside that slim aluminium tube called an airplane, you don’t have to do much—you just have to ask the young people riding shotgun on the ladders, those who open the aircraft door. Feedback received ranges from stale and smelly to outright un-breathable and unsanitary. Every which way, the blast of what comes out from inside the airplane is so terrible, that those on duty outside instinctively turn away from it as the door is opened.
That this has only become worse over the last few decades is also a well-known secret. Especially when landing into extremely hot or cold ambient temperatures at airports. If the temperatures outside are comfortable, then to some extent, the fresh air permitted inside while taxiing would neutralise matters before doors were opened.
But why is the air onboard airplanes so bad to begin with? Aren’t we supposed to be getting fresh and clean air, after all, there are billions of cubic metres of absolutely pure air right outside the portholes, all so carefully brought to a comfortable temperature and pressure over sea level for us. As the announcement usually states. Lately, adept flyers may have noticed that airlines sometimes drop the information on temperature and cabin pressure in the announcement, so much temperature outside and so much height over sea level inside, because some parts of it would worry the passengers.
Truth is, even the pilots don’t believe what they have to say about the air onboard anymore. More than a few deaths onboard as well as medical episodes being linked to the air onboard airplanes have made them very, very careful.
What’s more worrying, however, is what the aviation industry has quietly done with the most important element of flying as a passenger, specifically, the air we breathe onboard. They simply let it go bad. In the name of fuel economy and higher profits, this is what happened with many “new generation” aircraft providing excellent fuel-efficient engines, thus proving once again that all new technology is not necessarily good for humanity.
Here’s what the new changes are:
1) They reduced the air pressure inside the airplane, moving up from 4,000 to 6,000 to around 8,000 and now often as high as 10,000 feet above Mean Sea Level (MSL), equivalent. Outside, at 35,000-40,000 feet above MSL, the air is much thinner, of course, and requires to be compressed. So, the lesser they need to compress, the lesser fuel they burn. Air pressure onboard can always be measured inside cabins with some very simple equipment, even easier now with people carrying portable computers to measure and keep records.
2) They simply did away with letting any really fresh cold air into the airplane at high altitudes, since that would also require fuel to heat. Instead, they now use air drawn through the hot engines (known as ‘bleed’, they can’t even get to calling it ‘air’ themselves), which is then mixed with the used air inside, forced through filters and cleaners, and then pumped right back into the cabin again. Air quality onboard can also be measured inside with some very simple equipment, and records kept on portable computers.
This mixture of stale air and ‘bleed’ is usually let into the aircraft in proportions that are pre-set by the airline and aircraft manufacturer, and the only parameter that is important to them, is fuel-cost saving. Even the least amount of fresh air allowed inside an aircraft flying at a high altitude would upset these fine calculations. So, typically, the pilot onboard has no say in adjusting these to try to improve air quality.
Somehow, for cockpit crew, the problem is solved by providing them with pure and fresh oxygen, if required. But that too can have disastrous results, as the yet unexplained crash of the Helios Boeing 737 Flight ZU-522, into a mountain in Greece, remains a mystery.
The filters and cleaners have to tackle a lot. In addition to used air, they also have to clean traces of a vast variety of chemicals and fuels, coming out of the jet engines. Imagine, then, for a moment that 100 of you are in a sealed air-con BEST bus, and that the air you breathe inside is a mix of the stale air and the air coming out of the exhaust, purified for you by expensive filters, mostly optional extras. Placed right next to the engine because, that’s right, it would save cost.
So now you are talking about filters and cleaners which need to be replaced very often. Since they cost a lot. Thousands of dollars, typically, and unlike your home air-conditioner filters—they can’t just be washed and re-installed. So, in this day and age of cost saving, and with nobody really watching, the filters and cleaners go on. For a long time.
And people keep falling sick. Or worse.
Till finally, some aviation crew, both cockpit and cabin, who get impacted the most because they are flying day in and day out—take the system head-on. In the UK, the US and Australia. And now they have some court judgements in their favour too.
More on toxic aviation air, soon, but meanwhile—please let us know —what are your experiences with air quality onboard airplanes, especially on long flights?
(This is the first part of a three-part series)
China’s immense promise will not be fulfilled, thanks to its government
I was recently asked the following question. Will China be the future engine of global economic growth? The answer is no. Almost every economic forecast predicts China’s economic growth in every area and places it in the forefront if not the top spot as a global economic superpower. However, every economic forecast at some point will be wrong and sadly China’s immense promise will not be fulfilled.
The reason is simple, China’s government. Its government and the communist party have no intention of giving up power. This is hardly surprising. What political party would voluntarily give up power? But political power is only part of the problem. The real problem is that the communist party does not want to give up economic power. China is still not a market economy. As long as the communist party remains in power, China will not be a market economy and that is why it will not fulfill its promise.
Let us start with something simple, information. Markets are about choice. To make a good choice, whether it is a car or an investment, requires good information. In China information is restricted and tightly controlled. The government believes that it understands the difference between important and dangerous information and that it always has access to both. It doesn’t.
Information has enormous value. It is not provided except for consideration or because there is an enforced legal requirement of disclosure. In societies with protected speech and free press, it is often difficult to cover up fraud, corruption, misdeeds, and even mistakes, because there is a market for their disclosure. In China and other restrictive societies the flow of information is severely regulated if not totally curbed. As a result everyone from investors to consumers and even bureaucrats do not have timely, accurate and complete information. The result is that investors make inefficient allocations of capital. Consumers buy poor sometimes even poisonous products and government officials make and execute ill-informed decisions. Over time the result of this information control can be disastrous.
The second problem is the banking system. In China almost the entire banking system is in the hands of the State. As we saw in the past year Chinese banks lent an amount equal to $1.4 trillion, which any sane economist would question. Much of this money was lent to local governments and other State-owned companies, all political entities. During this spree about 20% of the private export sector went under and another 20% was in danger of doing so. While inefficient State-owned companies were given more money than they knew what to do with, the more efficient private sector, which is responsible for much of the employment, was systematically starved for capital.
The result is two-fold. More of China’s economy has been transferred from the efficient private sector back into State hands. Economic development and economic growth is based on productivity growth. Productivity growth requires gains in the efficiency with which capital, labour and technology are used in an economy. More output from a given input. The Chinese banking system impedes productivity growth; because it has failed in its role as a financial intermediary by allocating capital inefficiently, while restrictions on information impede productivity growth through technological inefficiency. Restrictions also fail to provide a free exchange of ideas and protection for intellectual property.
The second problem is that much of the money lent by the banks will never be repaid. Many of the bad debts left over from the last recession are still on the books of the banks and listed as part of their capital. The bad loans from this recession are sure to be enormous.
Much of the money that was lent was lent to local governments. According to Victor Shih, a professor at Northwestern University the amount of bad loans could be as large as 11 trillion yuan, or about $1.6 trillion.
Toxic assets normally indicate the potential for a banking collapse followed by an explicit bailout often with taxpayer dollars. In China this does not happen, but it does not mean that growth will not be affected. As Professor Pettis of Guanghua University points out, a banking collapse will not happen in China because they are the result of a liquidity crisis. This does not mean that toxic assets will not affect growth. “The bailout implicitly requires that bank depositors subsidise the cleaning up of the banking industry. This in effect represents a large transfer of income from the household sector to the banks, to government and to businesses, equal annually to several percentage points.”
To continue growing China must either continue to export its surpluses or rebalance its economy in favor of consumers. It cannot do the former in a world awash with debt and it cannot do the latter with a system that favours banks, government and business over consumers.
In China power is wielded by the few without question or challenge. These few have and will continue to reap enormous benefit from the system they created and see no reason to change.