India’s Ministry of Steel has submitted a proposal to its counterparts in the Mines Ministry seeking a cut in royalties payable on iron ore mining to five percent from 15 percent at present, to boost higher domestic value addition, according to a report of the Ministry of Steel.
In its proposal, the Ministry of Steel said that the cut in the royalty rate will reduce stockpiles of low grade iron ore fines through incentivization for higher-volume beneficiation and pelletization and will also address both the short-term and long-term raw material challenges being faced by local steel mills.
The ministry pointed out that, compared to other major iron ore producing countries like Brazil and Australia, India has the highest rate of royalty payable for mining iron ore. “As a result of which the burden of manufacturing is quite high on steel manufacturers. Iron ore and coking coal are the two key raw materials used for steelmaking. India’s steel industry, which is expecting demand to fall by around 20 percent during the current calendar year as compared to 2019, is hoping some cost reductions will help them,” the Ministry of Steel report said.