A three-member committee of the Orissa government to be chaired by the finance secretary will recommend measures to the Government of India within a month on revision of ore royalty rates.
The decision to form the committee was taken at a meeting held on Saturday under the chairmanship of state Chief Secretary B K Patnaik.
“The committee will give its recommendations to the Centre within a month. It will also take views of experts. Earlier, the state government had urged the Centre to revise royalty rates of all minerals. We had also requested the Centre to direct Indian Bureau of Mines (IBM) to ensure that iron ore prices in the state are at par with the national average,” Patnaik told mediapersons here. The Union ministry of mines had recently constituted a study group headed by additional secretary for revision of royalty rates and rates of dead rent for minerals.
Dead rent is the rent fixed for mines without considering the fact whether the mine is profitable or not. This rent must be paid whether or not minerals are being extracted from the mines. The state government had demanded that the royalty rate needs to be made ad valorem for all minerals and raised to at least 20 per cent to ensure that that the state gets a fair share from its mineral wealth.
Chief Minister Naveen Patnaik had also called for imposition of mineral resources rent tax at the rate of 50 per cent of super normal profits made by the miners. Presently, the royalty rate for iron ore and chromite has been pegged at 10 per cent of sale price on ad-valorem basis while for manganese ore, it is 4.2 per cent of the sale price. For bauxite, the royalty stands at 0.5 per cent of the aluminium metal price in the London Metal Exchange (LME). For F Grade coal, the royalty is determined by the formula- a+bp where a= Rs 55, b= five per cent and p being the pithead price of coal. Royalty is an amount payable by a lessee to the lessor for removing or consuming a mineral as per Section 9 (1) of the Mines & Minerals (Development & Regulation) Act, 1957. Section 9 (3) of the Act empowers the Central government to enhance or reduce the rate at which royalty shall be payable in respect of any mineral with effect from such date as may be specified in the notification.
