BHUBANESWAR: After proposing a raft of reforms in the Mines and Minerals (Development and Regulation) Amendment Bill, 2021 to facilitate captive mines to sell up to 50 per cent (pc) of the mined mineral in a bid to improve production and lessen imports of iron ore and coal, the Ministry of Mines has come up with a fresh proposal to fix additional amount on such sale.
In order to bring transparency in prescribing the additional amount and to eliminate discretion in subordinate legislation, the Ministry has proposed to specify the additional amount in the Act. “It is proposed to fix the additional amount as a function of royalty payable. An effort has been made to see that a portion of the difference between the average sale price and the average cost of production is captured as the proposed additional amount, while at the same time keeping sufficient incentive for the captive mines owners,” the draft amendment said.
Inviting comments and suggestions from states, mining industry, industry associations and other stakeholders by February 24, 2021, the Ministry said factors like price fluctuations in the market for different grades of mineral over the past five years (2015-16 to 2019-20) and expected fall in price due to increased supply of mineral by captive miners have been taken into account.
The additional amount to be levied on minerals from auctioned and non-auctioned captive mines will be different. In case of non-auctioned mines, the additional amount to be charged on iron ore (lumps) is equivalent to 2.5 times of royalty payable while in case of fines, it will be 1.5 times of the royalty. For bauxite of metallurgical grade, the amount to be charged is 1.5 times of the royalty payable while for non-metallurgical grade it will be equivalent to the royalty.
The Ministry proposed to charge an additional charge equivalent to the royalty for chromite up to 40 pc of Chromium oxide and two times of the royalty for chromite above 40 pc of the compound.The additional amount will be equal to royalty for manganese with less than 35 pc content while the amount will be equivalent to five times of the royalty for manganese with 35 pc or more manganese content.
Limestone mines owners will have to pay an additional amount equivalent to 2 times of the royalty for limestone with less than 1.5 pc silica content and charge will be equivalent to the royalty for other grades. However, for auctioned mines there will be no additional charge for sale of minerals up to 25 pc while sale above 25 pc to 50 pc of the annual production will be 50 pc of the royalty.
Additional amount to be charged on iron ore (lumps) is equivalent to 2.5 times of royalty payable
For iron fines, it will be 1.5 times of the royalty
For bauxite of metallurgical grade, the amount to be charged is 1.5 times of the royalty payable