NEW DELHI (Reuters) - Indian iron ore industry has asked the government to remove a 15 percent duty on exports following a sharp drop in prices and falling demand from China, the main buyer of the ore, an official said on Tuesday.

The levy was imposed in June after the steel industry said iron ore exports should be discouraged to ensure enough raw materials for the domestic firms.
S.B.S. Chauhan, an advisor to the Federation of Indian Mineral Industries, representing private and state-run miners, said the duty had pushed prices down by about 40 percent over the past three months.
He said medium grade iron ore prices had dropped to $75 to $85 per ton free-on-board from $130 to $140 in June, making the business unsustainable.
“Unless demand from China increases, mines will have to curtail their production,” Chauhan said, adding a price below $100 a ton was unviable for the industry due to steep increases in transportation costs.
Sesa Goa, Dempo and Salgaocar from India’s western region and Essel Mining and Rungta group of mines from the eastern sector are among the members of the federation, which submitted the note to the government on Saturday.
State-run National Mineral Development Corp. is also a member of the federation.
Nearly 75 percent of India’s annual iron ore exports of about 100 tons go to China.
Exports in the first half of September dropped to 1.99 million tons from 2.7 million tons in the same period last year, Chauhan said. Sales in August were also lower at 4.57 million tons against 5.39 million a year earlier, he said.
Chauhan said there was no pick up in Chinese demand even after Brazilian miner Vale demanded an increase in term iron ore prices, effectively erasing an Asian discount that offset higher freight costs and bringing on level with European prices.
“As of now there is no fresh demand from China despite Vale’s demand for higher contracted prices,” he said.
Chauhan said miners had cancelled 10 million tons of iron ore transported by rail since July due to falling demand from China and domestic consumers.