Naveen urges mines ministry to quicken royalty revision

Odisha has been losing out on revenue because of delay in revision of royalty rates of minerals

With Odisha losing out on revenue because of delay in revision of royalty rates of minerals, chief minister Naveen Patnaik has urged the central mines ministry to expedite the revision pending since August 2012.

 

"The rates of royalty and dead rent were last revised by the Government of India with effect from August 13, 2009 and as such the enhancement in the rates of royalty and dead rent was due from August 13, 2012. I would, therefore urge upon the Central government to kindly appreciate our concern and enhance the rates of royalty and dead rent without any further delay. The rates may kindly be revised with effect from August 13, 2012”, Patnaik wrote to Union mines minister Dinsha Patel.

 

"My government has given suggestions to the study group from time to time on various issues including inter alia, the rates of royalty, the rates of dead rent, price fixing mechanism, imposition of mineral resource rent tax and e-auction of minerals”, Patnaik said.

 

To recommend revision in royalty of minerals, the ministry had constituted a study group that has already submitted its report during the end of June.

 

Recently, Odisha, the biggest iron ore producing state, had voiced its opposition to the Centre's proposal to raise royalty rate on iron ore to 15 per cent of sale price on ad-valorem basis, up from 10 per cent presently. 

 

"The Government of India has notionally agreed to raise royalty rate on iron ore from 10 per cent to 15 per cent. But this hike is not acceptable to us. We believe that the royalty rate of 15 per cent is not enough. The Centre should fix the royalty rate after proper examination of profits made by miners. Earlier, we had brought to the notice of the Central government regarding the super normal profits earned from mining activities”, director (mines) Deepak Mohanty had said recently.

 

 

The study group has suggested royalty for iron ore at 15 per cent of sale price against 20 per cent demanded earlier by the state. The state government had demanded for 20 per cent royalty rate factoring in FOB (freight on board) price of iron ore of Central PSU National Mineral Development Corporation (NMDC).

 

 

 

Similarly, for all grades of manganese ore, the study group has recommended royalty at five per cent of sale price, lower than the state's demand of 12 per cent. For manganese ore concentrates, the group has suggested that the existing rates may continue.