Government's proposal on raising royalty on iron ore by 5% has left miners and manufacturers in an adverse condition. They say, industry is already undergoing a bad phase and extra duty on iron ore will make is worst.
In a representation to the Union Mines Ministry, Goa Mineral Ore Exporters' Association (GMOEA) said that any hike in royalty rate for iron ore would “deter the mining of lower grade ore which is detrimental to the conservation of mineral.”
Currently, the royalty is charged at the rate of 10 percent of sale price on ad-valorem basis from the iron ore miners. The Mines Ministry is considering a proposal to increase it to 15 percent and a study group on revision of rates of royalty has been constituted by the ministry.
The last increase in royalty rate of iron ore was made in August, 2009 and according to the provisions of the Mines and Mineral (Development and Regulation) Act, 1957, the rates can get revised after three years, if necessary.
However, GMOEA – an industry body of miners in Goa, said that any hike in royalty rate would affect the industry, particularly to the producers of lower grades of iron ore and listed out several issues concerning the miners.
According to it, the new mining bill has already proposed payment of an amount equivalent to the royalty paid by the miners to the District Mineral Foundation. Besides, the royalty payable on iron ore in the country, at 10 percent currently, is much higher than other mineral-rich nations, it added.
“This would made substantial portion of mining in the country unviable”, the GMOEA said.
As per the industry body from Goa, Australia charges between 5 and 7.5 percent, while Indonesian rate is at 3 percent. Besides, China's rate is at 2 percent, while in Brazil, it is less than 3 percent. Other iron ore producing countries like Canada, South Africa and Chile do not levy any royalty.
On the other hand, sponge manufacturers association president, Chattisgarh chapter, Mr. Anil Nachrani also mentioned that increase in royalty will have an adverse affect on the industry which is already going through a rough phase.
He also mentioned that manufacturers will protest against this hike.
PTI
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