Lok Sabha Question No. 3361 (UNSTARRED), answered on 2023-08-09
Subject: Royalty Rates
Ministry: MINES
Asked by: Adala Prabhakara Reddy

## GOVERNMENT OF INDIA MINISTRY OF MINES

## LOK SABHA UNSTARRED QUESTION NO. 3361

ANSWERED ON 09.08.2023

## ROYALTY RATES

3361. SHRI ADALA PRABHAKARA REDDY:

Will the Minister of MINES be pleased to state:

- (a) the prevailing mineral royalty rates in India;
- (b) whether there has been any change in these rates in the last five years;
- (c) if so, the details thereof and if not, the reasons therefor; and
- (d) the steps being taken by the Government to ensure that mineral royalty rates are commensurate with those in other comparable countries?

## ANSWER

## THE MINISTER OF MINES, COAL AND PARLIAMENTARY AFFAIRS (SHRI PRALHAD JOSHI)

(a): As per Section 9 of the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act, 1957), every mining lease holder needs to pay royalty for major minerals  removed  or  consumed  as  per  the  royalty  rates  specified  in  the  Second Schedule  of  the  MMDR  Act,  1957.  The  royalty  rates  of  minerals  specified  in  the Second Schedule of the MMDR Act, 1957 are at Annexure.

(b) to (d): The rates of royalty on minerals are revised from time to time under subsection  (3)  of  Section  9  of  the  MMDR  Act,  1957.  The  proviso  to  Section  9(3) stipulates  that  the  Central  Government  shall  not  enhance  the  rate  of  royalty  in respect of any mineral more than once during any period of three years. It does not stipulate  that  royalty  has  to  be  revised  every  three  years.  Royalty  rates  for  major minerals were revised on 01.09.2014. Further, the royalty rate for mineral sillimanite was revised on 15.03.2022.

The  various  ways  in  which  royalty  is  levied  on  minerals  are:  (i)  royalty  on  pertonnage  basis,  (ii)  royalty  on ad  valorem basis,  and  (iii)  royalty  on  the  basis  of percentage  of  London  Metal  Exchange  (LME)  price  chargeable  on  the  contained metal in ore.

Royalty of only 6 major minerals, namely Asbestos, Graphite, Limestone, Limeshell, Marl and Tungsten are payable on per-ton basis. For all other minerals the royalty is fixed on ad valorem basis or on the basis of percentage of LME price chargeable on the contained metal in ore. For these minerals, the increasing value of minerals  as per  the  market  /  LME  price  is  automatically  captured  as  royalty  is  fixed  as  a percentage of average sale price / LME price of minerals.

The State  wise  royalty  accrual  of  major  minerals  from  2016-17  to  2021-22  shows that the royalty accrual to the State Governments has increased over the years.

| Year                  | Royalty accrual (in Rs. Crore)   |
|-----------------------|----------------------------------|
| 2016-17               | 9,695.88                         |
| 2017-18               | 12,386.16                        |
| 2018-19               | 17,169.92                        |
| 2019-20               | 16,866.92                        |
| 2020-21 (Provisional) | 16,830.53                        |
| 2021-22 (Provisional) | 38,840.48                        |

Further, through amendment in the MMDR Act on 12.01.2015, auction regime was introduced for grant of mineral concessions to improve transparency and to ensure that State Governments get a fair share of revenue in terms of auction premium in addition to royalty revenue in allocation of natural resources. Due to operationalization of auctioned mines, the revenue to the State Governments from mineral sector has increased considerably.

*****

## Annexure referred in reply to part (a) of Lok Sabha Unstarred Question No. 3361

| 1. Apatite and Rock Phosphate: (i) Apatite (ii) Rock Phosphate (a) Above 25% P2O5 (b) Upto 25% P2O5                    | Five per cent. of average sale price on ad valorem basis. Twelve and half per cent. of average sale price on ad valorem basis. Six per cent. of average sale price on ad valorem basis.                                                                                                                                                                                                                                |
|------------------------------------------------------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 2. Asbestos:                                                                                                           |                                                                                                                                                                                                                                                                                                                                                                                                                        |
| (i) Chrysotile (ii) Amphibole                                                                                          | Eight Hundred and Eighty rupees per tonne. Fifteen per cent. of average sale price on ad valorem                                                                                                                                                                                                                                                                                                                       |
| 3. Barytes:                                                                                                            | Six and half per cent. of average sale price on ad valorem basis.                                                                                                                                                                                                                                                                                                                                                      |
| 4. Bauxite and Laterite:                                                                                               | (a) Metallurgical Grade: Zero point six zero per cent. of London Metal Exchange Aluminium metal price chargeable on the contained aluminium metal in ore produced for those dispatched for use in alumina and aluminium metal extraction. (b) Non Metallurgical Grade: Twenty five per cent. of average sale price on ad valorem basis for those dispatched for use other than alumina and aluminium metal extraction. |
| 5. Brown Ilmenite (Leucoxene), Ilmenite, Rutile and Zircon:                                                            | Two per cent. of average sale price on ad valorem basis.                                                                                                                                                                                                                                                                                                                                                               |
| 6. Cadmium:                                                                                                            | Fifteen per cent. of average sale price on ad valorem basis.                                                                                                                                                                                                                                                                                                                                                           |
| 7. Calcite:                                                                                                            | Fifteen per cent. of average sale price on ad valorem basis.                                                                                                                                                                                                                                                                                                                                                           |
| 8. China clay or Kaolin: (including ball clay and white shale, white clay) (i) Crude (ii) Processed (including washed) | Eight per cent. of average sale price on ad valorem basis. Twelve per cent. of average sale price on ad valorem basis.                                                                                                                                                                                                                                                                                                 |
| 9. Clay others:                                                                                                        | Twenty rupees per tonne.                                                                                                                                                                                                                                                                                                                                                                                               |
| 10. Coal (including Lignite):                                                                                          | *                                                                                                                                                                                                                                                                                                                                                                                                                      |
| 11. Chromite:                                                                                                          | Fifteen per cent. of average sale price on ad valorem basis.                                                                                                                                                                                                                                                                                                                                                           |
| 12. Columbite-tantalite:                                                                                               | Ten per cent. of average sale price on ad valorem basis.                                                                                                                                                                                                                                                                                                                                                               |
| 13. Copper:                                                                                                            | Four point six two per cent. of London Metal Exchange Copper metal price chargeable on the contained copper metal in ore produced.                                                                                                                                                                                                                                                                                     |
| 14. Diamond:                                                                                                           | Eleven point five per cent. of average sale price on ad valorem basis.                                                                                                                                                                                                                                                                                                                                                 |
| 15. Dolomite:                                                                                                          | Seventy-five rupees per tonne.                                                                                                                                                                                                                                                                                                                                                                                         |
| 16. Dunite:                                                                                                            | Thirty rupees per tonne.                                                                                                                                                                                                                                                                                                                                                                                               |
| 16A. Emerald:                                                                                                          | Ten per cent. of average sale price on ad valorem basis.                                                                                                                                                                                                                                                                                                                                                               |
| 17. Felspar: 18. Fire Clay:                                                                                            | Fifteen per cent. of average sale price on ad valorem basis. Twelve per cent. of average sale price on ad valorem                                                                                                                                                                                                                                                                                                      |

| 19. Fluorspar: (also called fluorite)                                                                                                                                                                                                                                           | Eight per cent. of average sale price on ad valorem basis.                                                                                                                                                                                                                       |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 20. Garnet:                                                                                                                                                                                                                                                                     |                                                                                                                                                                                                                                                                                  |
| (i) Abrasive (ii) Gem                                                                                                                                                                                                                                                           | Four per cent. of average sale price on ad valorem basis. Ten per cent. of average sale price on ad valorem basis.                                                                                                                                                               |
| 20A. Glauconite and Potash:                                                                                                                                                                                                                                                     | Two point five per cent. of price for Muriate of Potash published by the Government of India, Ministry of Chemicals and Fertilizers, Department of Fertilizers chargeable on the contained K2O in ore produced for those dispatched for making such Muriate of Potash.           |
| 21. Gold:                                                                                                                                                                                                                                                                       |                                                                                                                                                                                                                                                                                  |
| (i) Primary                                                                                                                                                                                                                                                                     | Four per cent. of London Bullion Market Association Price (commonly referred to as London Price) chargeable on the gold metal in ore produced. Three point three per cent. of London Bullion Market Association Price (commonly referred to as London                            |
| (ii) By-product gold                                                                                                                                                                                                                                                            | Price) chargeable on the by-product gold metal actually produced.                                                                                                                                                                                                                |
| 22. Graphite: (i) With 80 per cent. or more fixed carbon (ii) With 40 per cent. or more fixed carbon but less than 80 per cent. fixed carbon (iii) With 20 per cent. or more fixed carbon but less than 40 per cent. fixed carbon (iv) With less than 20 per cent. fixed carbon | Two hundred and twenty-five rupees per tonne. One hundred and fifty rupees per tonne. Sixty-five rupees per tonne. Twenty-five rupees per tonne.                                                                                                                                 |
| 23. Gypsum: 24. Iron Ore:                                                                                                                                                                                                                                                       | Twenty per cent. of average sale price on ad valorem basis.                                                                                                                                                                                                                      |
| (CLO, Lumps, fines and concentrates all grades)                                                                                                                                                                                                                                 | Fifteen per cent. of average sale price on ad valorem basis.                                                                                                                                                                                                                     |
| 25. Lead:                                                                                                                                                                                                                                                                       | (a) Eight point five per cent. of London Metal Exchange Lead metal price chargeable on the contained lead metal in ore produced. (b) Fourteen point five per cent. of London Metal Exchange Lead metal price chargeable on the contained lead metal in the concentrate produced. |
| 26. Limestone:                                                                                                                                                                                                                                                                  |                                                                                                                                                                                                                                                                                  |
| (i) L. D. Grade (less than 1.5 per cent. silica content) (ii) Others                                                                                                                                                                                                            | Ninety rupees per tonne. Eighty rupees per tonne.                                                                                                                                                                                                                                |
| 27. Lime kankar:                                                                                                                                                                                                                                                                | Eighty rupees per tonne.                                                                                                                                                                                                                                                         |
| 28. Limeshell:                                                                                                                                                                                                                                                                  | Eighty rupees per tonne.                                                                                                                                                                                                                                                         |
| 29. Magnesite:                                                                                                                                                                                                                                                                  | Three per cent. of average sale price on ad valorem basis.                                                                                                                                                                                                                       |
| 30. Manganese Ore:                                                                                                                                                                                                                                                              |                                                                                                                                                                                                                                                                                  |
| (i) Ore of all grade (ii) Concentrates                                                                                                                                                                                                                                          | Five per cent. of average sale price on ad valorem basis. One point seven per cent. of average sale price on ad valorem basis.                                                                                                                                                   |
| 31. Marl:                                                                                                                                                                                                                                                                       | Sixty rupees per tonne.                                                                                                                                                                                                                                                          |

| 32. Crude Mica, waste mica and scrap mica:                 | Four per cent. of average sale price on ad valorem basis.                                                                                                                                        |
|------------------------------------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 32A. Molybdenum:                                           | Seven point five per cent. of London Metal Exchange Molybdenum metal price chargeable on the contained Molybdenum metal in ore produced.                                                         |
| 33. Monazite:                                              | One hundred and twenty-five rupees per tonne.                                                                                                                                                    |
| 34. Nickel:                                                | Zero point one two per cent. of London Metal Exchange Nickel metal price chargeable on the contained nickel metal in ore produced.                                                               |
| 35. Ochre:                                                 | Twenty-four rupees per tonne.                                                                                                                                                                    |
| 35A. Platinum Group of Metals: (i) Platinum and Palladium: | Four per cent. of London Bullion Market Association price chargeable on the Platinum and Palladium metals in ore produced. Four per cent. of Johnson Matthey Precious Metals                     |
| (ii) Rhodium, Iridium and Ruthenium:                       | Management price chargeable on the Rhodium, Iridium and Ruthenium metals in ore produced.                                                                                                        |
| (iii) Osmium:                                              | Four per cent. of Osmium-Preis.com price chargeable on the Osmium metal in ore produced.                                                                                                         |
| 36. Pyrites:                                               | Two per cent. of average sale price on ad valorem basis.                                                                                                                                         |
| 37. Pyrophyllite:                                          | Twenty per cent. of average sale price on ad valorem basis.                                                                                                                                      |
| 38. Quartz:                                                | Fifteen per cent. of average sale price on ad valorem basis.                                                                                                                                     |
| 39. Ruby:                                                  | Ten per cent. of average sale price on ad valorem basis.                                                                                                                                         |
| 40. Sand (others):                                         | Twenty rupees per tonne.                                                                                                                                                                         |
| 41. Sand for stowing:                                      | **                                                                                                                                                                                               |
| 42. Shale:                                                 | Sixty rupees per tonne.                                                                                                                                                                          |
| and Quartzite: 44. Sillimanite, Kyanite and                | Twelve per cent. of average sale price on ad valorem basis.                                                                                                                                      |
| Andalusite: 45. Silver:                                    | per cent. of London Metal Exchange Price on by-product silver metal actually produced. per cent. of London Metal Exchange Silver Metal                                                           |
| (i) By-product                                             | Seven chargeable Five Price chargeable on the contained silver metal in ore                                                                                                                      |
| (ii) Primary Silver                                        | produced.                                                                                                                                                                                        |
| 46. Slate:                                                 | Forty-five rupees per tonne.                                                                                                                                                                     |
| 47. Talc, Steatite and Soapstone:                          | Eighteen per cent. of average sale price on ad valorem basis.                                                                                                                                    |
| 48. Tin:                                                   | Seven point five per cent. of London Metal Exchange Tin metal price chargeable on the contained tin metal in ore produced.                                                                       |
| 49. Tungsten:                                              | Twenty rupees per unit per cent. of contained WO3 per tonne of ore and on pro rata basis.                                                                                                        |
| 50. Uranium:                                               | Two per cent. of annual compensation amount received by M/s. Uranium Corporation of India Ltd., to be apportioned among the States on the basis of data provided by Department of Atomic Energy. |
| 51. Vanadium:                                              | Twenty per cent. of average sale price on ad valorem basis.                                                                                                                                      |
| 52. Vermiculite:                                           | Five per cent. of average sale price on ad valorem basis.                                                                                                                                        |

| 53. Wollastonite:                                                                                                                                                   | Fifteen per cent. of average sale price on ad valorem basis.                                                                                                                                                                                                                                |
|---------------------------------------------------------------------------------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 54. Zinc:                                                                                                                                                           | (a) Nine point five per cent. of London Metal Exchange Zinc metal price on ad valorem basis chargeable on contained zinc metal in ore produced. (b) Ten per cent. of London Metal Exchange Zinc metal price on ad valorem basis chargeable on contained zinc metal in concentrate produced. |
| 55. All other minerals not herein before specified (Agate, Corundum, Diaspore, Felsite, Fuschite-Quartzite, Jasper, Perlite, Pyroxenite, Rock Salt, Selenite, etc.) | Twelve per cent. of average sale price on ad valorem basis.                                                                                                                                                                                                                                 |

* Rates of royalty in respect of item No. 10 relating to Coal (including Lignite) as revised vide notification number G.S.R. 349(E), dated the 10th May, 2012 read with corrigendum G.S.R. 525(E), dated the 14 th  June, 2012 of the Government of India in the Ministry of Coal shall remain in force until revised through a separate notification by the Ministry of Coal.

**  Rates  of  royalty  in  respect  of  item  No.  41  relating  to  Sand  for  stowing  revised vide notification  number  G.S.R.  214(E),  dated  the  11th  April,  1997,  will  remain  in  force  until revised through a separate notification by the Ministry of Coal.