Lok Sabha Question No. 3899 (UNSTARRED), answered on 2018-08-09
Subject: Royalty Rates of Minerals
Ministry: MINES
Asked by: ALOK SANJAR

## GOVERNMENT OF INDIA MINISTRY OF MINES

## LOK SABHA

## UNSTARRED QUESTION NO. 3899

TO BE ANSWERED ON 09.08.2018

## ROYALTY RATES OF MINERALS

†3899. SHRI ALOK SANJAR:

Will the Minister of MINES be pleased to state:

- (a) whether  the  criteria  fixed  for  deciding  the  royalty  rates  are  complied  with  by  the Government while leasing mineral estates to private companies;
- (b) if so, the details thereof and comparative figures of royalty rates in India and other countries during the last three years and the current year;
- (c) whether  approval  of  Gram  Sabha  is  being  obtained  for  acquiring  land  under Panchayats Act, 1996 and Forest Rights Act, 2006 to grant mineral concessions and if so, the details thereof;
- (d) if  not, the cases of violations detected in this regard during the said period as on date; and
- (e) the action taken by the Government thereon?

## ANSWER

## THE MINISTER OF STATE FOR MINES (SHRI HARIBHAI PARTHIBHAI CHAUDHARY)

(a)  and  (b):  In  terms  of  Section  9(1)  of  the  Mines  and  Minerals  (Development  and Regulation) (MMDR) Act 1957, every mining lease holder needs to pay royalty for major minerals removed or consumed at the royalty rates specified in the Second Schedule of the MMDR Act, 1957. Proviso to Section 9(3) of the MMDR Act, 1957 stipulates that the Central Government shall not enhance the rates of royalty more than once during any period of three years. The last revision of royalty rates for major minerals was done in September, 2014. The Ministry of  Mines,  accordingly,  constituted  a  Study  Group  vide order no. 9/1/2018-M.V dated 09.02.2018 to revise the rates of royalty and dead rent.

Rates of royalty are fixed, inter-alia,  on  the  basis  of market  trends, cost  of  production and pit mouth value of minerals by a Study Group constituted for the purpose by the Government. The  Study  Group  also  considers  and  compares  royalty  rates/regime followed by mineral rich countries.

As compared with foreign countries, royalty rates in the country are fixed at ad valorem basis  for  most  of  major  minerals.  Most  countries  adopt  ad  valorem  royalty  rates,  few countries levying royalty on profits earned by miners.

(c) to (e): The mining leases in the country are granted as per provisions of the MMDR Act, 1957. However, before starting of any mining activities, all statutory provisions as contained  in  various  relevant  Acts  and  Rules  viz,  the  Environment  (Protection)  Act, 1986, the Forest (Conservation) Act, 1980, the provisions of the Panchayats (Extension to  the  Scheduled Areas) Act, 1996 (40 of 1996); and the Scheduled Tribes and other Traditional Forest Dwellers (Recognition of Forest Rights) Act, 2006 (2 of 2007) are to be complied with.

As  per  section  4(k)  of  the  provisions  of  the  Panchayats  (Extension  to  the  Scheduled Areas)  Act,  1996  the  recommendations  of  the  Gram  Sabha  or  the  Panchayats  at  the appropriate level shall be made mandatory prior to grant of prospecting licence or mining lease for minor minerals in the Scheduled Areas.

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