Lok Sabha Question No. 118 (STARRED), answered on 2015-12-07
Subject: Royalty Rates for Minerals
Ministry: MINES
Asked by: KULAMANI SAMAL, KAMLA DEVI PATLE

## GOVERNMENT OF INDIA MINISTRY OF MINES

## LOK SABHA STARRED QUESTION NO. 118 TO BE ANSWERED ON 7th DECEMBER 2015

## ROYALTY RATES FOR MINERALS

## *118. DR KULAMANI SAMAL: SMT KAMLA DEVI PAATLE:

Will the Minister of MINES be pleased to state:

- (a)  the details of current royalty rates of various minerals along with the criteria adopted for  fixation  of  royalty  rates,  mineral  and  State/UT-wise  and  the  year  in  which  they were revised last;
- (b)  whether the royalty rate of iron ore and bauxite per ton in respect of Odisha is equal with that of other States and if not, the reasons therefor;
- (c)  whether  the  various  mineral  rich  States  have  requested  the  Union  Government  to increase the royalty rates of various minerals;
- (d)  if so, the details and the status thereof along with the time by which revised royalty rates are likely to be made effective, State/UT-wise; and
- (e)  the  steps  taken  by  the  Government  for  development  of  the  mining  sector  in  the country?

## ANSWER

THE MINISTER FOR MINES AND STEEL (SHRI NARENDRA SINGH TOMAR)

- (a) to (e): A Statement is laid on the Table of the House.

STATEMENT REFERRED IN REPLY TO LOK SABHA STARRED QUESTION NO.118 FOR REPLY ON 07.12.2015  REGARDING  'ROYALTY RATES  FOR MINERALS' ASKED BY  DR. KULAMANI SAMAL AND SHRIMATI KAMLA DEVI PAATLE

- (a):  The  rates  of royalty  for  minerals  other  than  minerals  notified  as  minor  minerals  under section 3 (e) of the MMDR Act, 1957 are given in ANNEXURE . The Ministry of Mines has revised  the  rates  of  royalty  and  dead  rent  for  major  minerals  (other  than  coal,  lignite  and sand for  stowing) with  effect  from  1 st September  2014,  which have been published in  the Gazette of  India vide Notification  No.  630(E)  and  631(E) dated 1 st September,  2014.  The royalty is fixed on ad valorem basis, while for some minerals it is fixed on tonnage basis.

(b):  Yes  Madam.    The  rates  of  royalty  for  minerals,  including  iron  ore  and  bauxite,  are uniformly applicable for all States.

(c) No Madam. The Union Government has not received any request from State Government for increasing the royalty rates of minerals after revising the rates of royalty on 1.9.2014.

(d): Does not arise in view of reply given to (c) above.

(e):  The  Mines  and  Minerals  (Development  and  Regulation)  ( MMDR )  Act,  1957  was amended through the MMDR Amendment Ordinance, 2015, which was promulgated on the 12 th January,  2015.  The  MMDR  Amendment  Bill,  2015  to  replace  the MMDR  Amendment Ordinance, 2015 was passed by the Parliament and has come into force with effect from 12 th January, 2015.

The most  important provision  of  the  MMDR  Amendment  Act,  2015  is  the  grant  of mineral concessions, for major minerals including iron ore, through auction by competitive bidding which is a transparent and non-discriminatory method and which will also obtain for the State Government its fair share of value of the mineral resources.

The other important provisions of the MMDR Amendment Act, 2015 are:

- (i) Transition  provisions  for  extension  of  existing  leases  to  obviate  disruptions  in supply of ore and to ensure regular supply of raw material to the industry;
- (ii)  Establishment  of  District  Mineral  Foundation  for  the  interest  and  benefit  of persons, and areas affected by mining related operations;
- (iii) Assured  tenure and easy transferability  of  mineral  concessions  granted through auction;
- (iv) Establishment  of  National  Mineral  Exploration  Trust  for  regional  and  detailed exploration; and
- (v)  Stricter penalty provisions to deter illegal mining.

***

ANNEXURE REFERRED IN REPLY TO LOK SABHA STARRED QUESTION NO.118 FOR REPLY ON 07.12.2015  REGARDING  'ROYALTY RATES  FOR MINERALS' ASKED BY  DR. KULAMANI SAMAL AND SHRIMATI KAMLA DEVI PAATLE

## Rates of royalty for minerals other than minerals notified as minor minerals under section 3(e) of the MMDR Act, 1957

|   1. | Apatite and Rock Phosphate: (i) Apatite (ii) Rock Phosphate (a) Above 25% P 2 O 5 (b) Upto 25% P 2 O 5   | 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 basis.                                                                                                                                                                                                                                                                                                             |
|    3 | Bauxite:                                                                                                 | (a) Metallurgical Grade: Zero point six zero per cent. of London Metal Exchange Aluminium metal price chargeable on the contained aluminum 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 & aluminium metal extraction. |
|    4 | Brown Ilmenite (Leucoxene), Ilmenite, Rutile and Zircon:                                                 | Two per cent. of average sale price on ad valorem basis.                                                                                                                                                                                                                                                                                                                                                            |
|    5 | Cadmium:                                                                                                 | Fifteen per cent. of average sale price on ad valorem basis.                                                                                                                                                                                                                                                                                                                                                        |
|    6 | Coal (including Lignite):                                                                                | *                                                                                                                                                                                                                                                                                                                                                                                                                   |
|    7 | Chromite:                                                                                                | Fifteen per cent. of average sale price on ad valorem basis.                                                                                                                                                                                                                                                                                                                                                        |
|    8 | Columbite-tantalite:                                                                                     | Ten per cent. of average sale price on ad valorem basis.                                                                                                                                                                                                                                                                                                                                                            |
|    9 | Copper:                                                                                                  | Four point six two per cent. of London Metal Exchange Copper metal price chargeable on the contained copper metal in ore produced.                                                                                                                                                                                                                                                                                  |
|   10 | Diamond:                                                                                                 | Eleven point five per cent. of average sale price on ad valorem basis.                                                                                                                                                                                                                                                                                                                                              |
|   11 | Fluorspar: (also called fluorite)                                                                        | Eight per cent. of average sale price on ad valorem basis.                                                                                                                                                                                                                                                                                                                                                          |
|   12 | 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.                                                                                                                                                                                                                                                                                                  |
|   13 | 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.                                                                                                                                                                                                                                                                      |

|    | (ii) By-product gold                                                                                                                                                                                                                                                        | Three point three per cent. of London Bullion Market Association Price (commonly referred to as London Price) chargeable on the by-product                                                                                                                                       |
|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 14 | 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 | gold metal actually produced. 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.                                                                                                   |
| 15 | Iron Ore: (CLO, Lumps, fines and concentrates all grades)                                                                                                                                                                                                                   | Fifteen per cent. of average sale price on ad valorem basis.                                                                                                                                                                                                                     |
| 16 | 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. |
| 17 | Limestone: (i) L. D. Grade (less than 1.5 per cent. silica content) (ii) Others                                                                                                                                                                                             | Ninety rupees per tonne. Eighty rupees per tonne.                                                                                                                                                                                                                                |
| 18 | Limeshell:                                                                                                                                                                                                                                                                  | Eighty rupees per tonne.                                                                                                                                                                                                                                                         |
| 19 | Magnesite:                                                                                                                                                                                                                                                                  | Three per cent. of average sale price on ad valorem basis.                                                                                                                                                                                                                       |
| 20 | 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.                                                                                                                                                   |
| 21 | Marl:                                                                                                                                                                                                                                                                       | Sixty rupees per tonne.                                                                                                                                                                                                                                                          |
| 22 | Monazite:                                                                                                                                                                                                                                                                   | One hundred and twenty-five rupees per tonne.                                                                                                                                                                                                                                    |
| 23 | Nickel:                                                                                                                                                                                                                                                                     | Zero point one two per cent. of London Metal Exchange Nickel metal price chargeable on the contained nickel metal in ore produced.                                                                                                                                               |
| 24 | Pyrites:                                                                                                                                                                                                                                                                    | Two per cent. of average sale price on ad valorem basis.                                                                                                                                                                                                                         |
| 25 | Ruby:                                                                                                                                                                                                                                                                       | Ten per cent. of average sale price on ad valorem basis.                                                                                                                                                                                                                         |
| 26 | Sand for stowing:                                                                                                                                                                                                                                                           | **                                                                                                                                                                                                                                                                               |

|   27. | Sillimanite:                                                                                | Two point five per cent. of average sale price on ad valorem basis.                                                                                                                                                                                                                         |
|-------|---------------------------------------------------------------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|    28 | Silver: (i) By-product (ii) Primary Silver                                                  | Seven per cent. of London Metal Exchange Price chargeable on by-product silver metal actually produced. Five per cent. of London Metal Exchange Silver Metal Price chargeable on the contained silver metal in ore produced.                                                                |
|    29 | Tin:                                                                                        | Seven point five per cent. of London Metal Exchange Tin metal price chargeable on the contained tin metal in ore produced.                                                                                                                                                                  |
|    30 | Tungsten:                                                                                   | Twenty rupees per unit per cent. of contained WO 3 per tonne of ore and on pro rata basis.                                                                                                                                                                                                  |
|    31 | 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.                                                                                            |
|    32 | Vanadium:                                                                                   | Twenty per cent. of average sale price on ad valorem basis.                                                                                                                                                                                                                                 |
|    33 | Vermiculite:                                                                                | Five per cent. of average sale price on ad valorem basis.                                                                                                                                                                                                                                   |
|    34 | Wollastonite:                                                                               | Fifteen per cent. of average sale price on ad valorem basis.                                                                                                                                                                                                                                |
|    35 | 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. |
|    36 | All other minerals not herein before specified (Kyanite, Perlite, Rock Salt, Selenite etc.) | Twelve per cent. of average sale price on ad valorem basis.                                                                                                                                                                                                                                 |