- Premiums at mine auctions may be capped at 50%
- Govt mulls uniform export duty across iron ore grades
The government held a follow-up meeting on iron ore reforms on 4 September, following the first round chaired by Union Minister Piyush Goyal on 26 August. Reforms were discussed with an aim to boost domestic ore supplies, with demand projected to rise from the current 255 million tonnes (mnt) per annum in line with India’s growing steel production.
Key proposals included a review of the mine auction mechanism, with a plan to cap premiums at 50% and award blocks based on the highest upfront payment to ensure timely mining operations. Since 2015, 138 blocks have been auctioned but only 37 are operational, largely due to clearance delays and uneconomic projects.
The meeting also discussed bringing non-auctioned mines under a Minimum Dispatch Agreement (MDPA), requiring dispatch of at least 80% of environmental clearance (EC) capacity. Indian miners hold ECs for 470 mnt of iron ore but produce only about 290 mnt.
On trade policy, the government is considering a uniform export duty across iron ore grades, though pellets may remain exempt. India exported around 38 mnt in CY’24 (30 mnt fines/lumps and 8 mnt pellets), with the current duty at 30% for >58% Fe ore, while pellets carry no duty.
Additionally, the Indian Bureau of Mines (IBM) has been tasked to consolidate stakeholder views on linking domestic ore prices with global benchmarks and submit its final report by the end of September.
BigMint reached out to the Ministry of Commerce for comments via email; however, no response was received at the time of publication.
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