The crucial meeting of the Mines Ministry panel for finalising royalty rates for minerals with natural resources-rich states is to take place on June 21 amid anticipation that there could a hike by as much as 5 per cent in the rates of key minerals like iron ore, copper, lead, zinc and aluminium which have not been revised since 2009.
Principal Secretaries of all the mineral-rich states are to meet the Working Group of the Mines Ministry led by Special Secretary Gauri Kumar which is looking into the process of revising the royalty rates, for one final time on Friday as the panel has to submit its report on royalty rates to the Mines Minister Dinsha Patel by June 30, which is the deadline for it to do so.
If the rates are okayed by the states in the meeting, then these would be sent for Cabinet’s approval and subsequently will be implemented across the country, sources informed. As reported by The Pioneer, the panel which had met representatives of the states earlier on April 26, is to discuss its recommendations on the royalty rates with them during the meeting on Friday.
The working group is learnt to have prepared its report on revision of royalty rates and though there were apprehensions within the ministry that it may maintain status quo owing to the bleak scenario of the commodities market globally (mainly due to lack of buyers in North American, European and Chinese markets owing to recessionary trends), a hike of around 5 per cent at least apparently has been recommended by it.
Official sources said that in case of key mineral like iron ore, a 5 percent hike in royalty rates has been suggested by the panel (the prevailing rate is 10 per cent on it). The decision to upwardly revise the royalty rates also emanates from the fact that while a revision has to be effected after every three years, there has been a four year gap and the mineral-rich states have been clamouring for an increase as it is a significant source of income for them.
Naturally states have been asking for a considerable hike of around 10 per cent in royalty rates for all minerals. They have been seeking royalty rates to be based on london Metals Exchange (lME) linked prices for key minerals like copper, lead, zinc and aluminium (all of which are linked with lME), however the Government is trying to find out a rate which is linked to RBI base, which is moderately priced. This, sources said, is a usual practice as the Government normally implements a moderate hike in royalty rates.
Once the rates suggested by the panel are accepted by the states during the June 21 meeting, the panel would submit its report to the ministry and these recommendations would then be brought forward before the Cabinet.
Royalty is a charge which the mine owner has to pay to the concerned State government, under whose jurisdiction the mine which he/she is exploiting, falls.