Majority of Indian provinces agree on iron-ore royalty hike
KOLKATA (miningweekly.com) – The majority of India’s mineral-rich provinces have agreed to increase iron-ore royalty rates to 15% from the current.10%.
According to an official in the Mines Ministry, a working group set up to revise royalty rates in the mineral extraction industry had finalised the increase in the case of iron-ore, with the working note expected to be sent to the federal government’s Cabinet of Ministers for approval.
However, the sole dissent to the increase the royalty rate was put on record by the government of eastern Indian province of Orissa, which demanded increase of royalty on iron-ore to 20%, the official said.
The Federation of Indian Mineral Industries (FIMI) had also submitted its opposition to the proposed hike in royalty rates, claiming it would impact margins of miners. However, all other provinces recorded their acceptance to the 5% increase.
The royalty is charged to the mine owner and paid to the provincial government, in whose territory the mining extraction is operated. The rate was also based on quantity of mineral extracted and not on the profit margins of the miner or the lease holder.
Apart from iron-ore, the working group has also hiked royalty rates applicable for other minerals like zinc, copper, lead and aluminium, but the official declined to divulge the new rates proposed on the grounds that a consultation process with the provincial governments was not yet complete
India last revised royalty rates on mineral extraction in 2009, following which total revenues accruing to all the mineral-rich provinces increased from $415-million in 2008, to $800-million in 2010.
India’s major iron-ore bearing provinces were Orissa, Jharkhand, Chattisgarh, Karnataka and Goa accounting for 33.9%, 26.3%, 18.8%, 12.3% and 5.3% respectively of the country’s total iron-ore reserves of 28.52-billion tonnes as per the National Mineral Inventory 2010.
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