Govt might fix output floor for iron ore mines

Iron ore production saw 23% growth in 2016-17 over a year before, at 190 mt: Macquarie

The central government is working on a proposal for encouraging companies to mine more iron ore, by benchmarking the mining capacity and linking it with royalty payment.

At present, if a company has a mine with 10 million tonnes (mt) capacity but is extracting only four mt, it pays royalty on the latter amount. With the new proposal, the government would fix an output floor. Internationally, this is 80-85 per cent of the total capacity.

According to a senior official, the proposal would be ready after consultations between the steel and mines ministries. The official did not elaborate whether the benchmarking would