India: Centre pushes for beneficiation of low grade ore, seeks comments by end August

The Ministry of Mines has sought stakeholder comments by 31 August 2022 on a beneficiation policy to ensure better utilisation of low and lean grade iron ore resources.

The Ministry set up a committee, which after several deliberations has recommended the following:

• A mandate that will require 80% of the total mineral below 58% Fe grade produced in a year to be upgraded to 62% Fe grade and above.
• In case the lessee, who is to be assessed quarterly basis, falls short of this mandate shall pay the state government an amount of royalty and premium as applicable to iron ore lumps or fines of 62-65% grade on the shortfall.
• A reconciliation of the total amounts will be allowed at the end of the year, and if the lessee reaches his annual mandate then his previously paid amount for quarterly shortfalls will be adjusted against dues for the last quarter of that year.
• For non-auctioned mines, such shortfall will attract an amount equal to the four times of royalty to be paid on iron ore of grade 62-65% Fe (lumps or fines) in addition to the actual royalty to be paid on such quantity at the time of its removal or consumption.
• If the lessee fails to beneficiate 80% of low grade material for two consecutive years and pay the amount – royalty applicable on 62-65% for the differential amount — then he could see his lease terminated. Further, the state government may pre-empt such low-grade material, below 58% Fe content, and suitably dispose of it.
• The new changes will allow the transfer of low-grade ore to neighbouring mines to be beneficiated or to a plant outside lease. This quantity being removed from the mine will count under the 80% mandate and to make this less ambiguous, and avoid double imposition of royalty or loss to the state, the centre proposes to make the required changes to the rules.
• Lessees will be charged royalty, bid premium, etc on the grade and quantity of throughput ore irrespective of the location of the plant whether inside or outside the lease area.
• A concession of 5% in the rate of royalty on the quantity of low grade ore beneficiated through wet process and 10% concession in the rate of royalty on the quantity of low grade ore beneficiated through dry process may be given on 20% of the annual production of iron ore of all grades. This benefit is to be extended only to the ore of less than 58% (upgraded to 62% Fe contents and above).
• Comments are being sought on beneficiation of existing stacks of low grade ore, and slimes, over and above the 20% capping, belonging to the existing lessee as prescribed above through suitable statutory provisions.
• The centre proposes to revisit the policy after 5 years.
• Beating the mandate will get lessees additional marks in the star rating.
• The centre will consider a fine, in the form of a levy of an additional amount, two years after the notification of this beneficiation rule.