India’s Ministry of Mines has proposed a framework of charging additional payments from captive mine operators to sell 50 percent of their production on a free-sale basis to steel mills without captive mines, a government official said on Tuesday, February 23.
The official said that the additional payment structure has been proposed under amendments to the Mines, Mineral Development and Regulation Act (MMDRA) and will be applicable to all mineral mines secured by operators outside the auction process.
Under the proposed framework, if a captive chromite ore mine operator seeks to sell 50 percent of production from the respective mine on the open market, it will have to pay an additional amount equivalent to the applicable royalty rate in the case of chromite with chrome oxide content of up to 40 percent and an additional payment equivalent to twice the royalty rate applicable in the case of chromite with chrome oxide content of 40 percent and above.
If captive manganese mine operators seek to sell up to 50 percent of production from their mines on the open market, additional payment equivalent to the royalty rate will be required to be paid for ore with manganese content less than 35 percent and an additional payment equivalent to five times the royalty rate applicable in the case of ore with manganese ore content above 35 percent.
In case of limestone, additional payment equivalent to twice the applicable royalty will need to be paid for the free sale up to 50 percent of production for grades with silica content less than 1.5 percent and equal to the royalty rate in the case of grades with silica content above 1.5 percent.
In case of captive iron ore mines, a mine operator will have to make an additional payment 2.5 times the applicable royalty rate in the case of lumps and 1.5 times the royalty rate in the case of fines to be able to sell up to 50 percent of production from the mines on the open market.
The proposed payment structure under the amendments has been put out for circulation seeking comments and feedback from industry stakeholders, the official said.