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Mines Ministry panel proposes 50 pc hike in iron ore royalty

NEW DELHI: The Mines Ministry-appointed study group has proposed revising royalty rate on iron to 15 per cent from 10 per cent now, a proposal miners' body FIMI said could sound a death knell for the industry. 

Sources said the study group, constituted in 2011 under the chairmanship of an
additional secretary in Mines Ministry, has suggested the hike in its second draft report which would be finalised later. 

It had made the same recommendation in the first report which was circulated among the stakeholders in May last year. 

"The Group in its second report has taken views from various stakeholders including state and centre governments, companies belonging to both public and private sectors and suggested royalty rates be hiked to 15 per cent from 10 per cent now," a source said. 

The decision is understood to have taken assuming that the sector, in general, is making huge profits. 

Painting contrary picture, Federation of 
Indian Miners Association (FIMI) said it will have a huge cascading effect on the industry, which has already seen huge job cuts and shutting shops. 

"The hike in royalty rate especially for iron ore will have very high impact on mining companies and have cascading effect. 

"It will also sound death knell for the industry. Apart from royalty itself, there are various other duties, levies which are directly linked to the rate of royalty and will have their adverse impact," FIMI Secretary General R K Sharma said.