Orissa, which has over 35 per cent of the country's iron ore reserves, has urged the Centre to impose a Mineral Resource Rent Tax on iron ore to ensure that huge profits earned from mining are not concentrated in the hands of a few merchant miners.
In a letter to the Prime Minister Manmohan Singh, Chief Minister Naveen Patnaik has made a strong bid for the introduction of the tax at the rate of 50 per cent of the surplus rent earned by the miners.
“The insatiable demand for iron ore in the export market has resulted in iron ore becoming a highly profitable commodity with returns from mining being far in excess of economically acceptable rates. In less than a decade iron ore prices have increased more than ten-fold. This is generating windfall gains far exceeding the level of investment or risks involved in the activity,” the chief minister wrote in a letter to Manmohan Singh.
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