BS reported that Orissa will raise the demand for doubling of royalty on six bulk minerals iron ore, manganese, bauxite, chromite, limestone and dolomite before the government of India.

A panel constituted by the state government under secretary (finance) will submit its comments by January 31 to the study group on royalty formed by the Union mines ministry.

A highly placed official source said that “The Union mines ministry had asked state governments to submit their views on royalty revision by January 15 but we have sought time till January 31. Our panel will pitch for doubling of royalty on the six bulk minerals.”

The state will also place the demand for raising dead rent on minerals.

Dead rent is the rent fixed for mines without considering the fact whether the mine is profitable or not. It is mostly fixed in a mineral lease. This rent must be paid whether or not minerals are being extracted from the mines.

The Union ministry of mines had recently constituted a study group headed by additional secretary (mines) for revision of rates of royalty and dead rent for minerals.

The state government had demanded that the royalty rate needs to be made ad valorem for all minerals and raised to at least 20% to ensure that that the state gets a fair share from its natural resources.

The state chief minister Mr Naveen Patnaik had also called for imposition of mineral resources rent tax at the rate of 50% of super normal profits made by the miners. The Union mines ministry, in its latest communication to the state government, had called for closer scrutiny on the windfall tax proposal to establish whether the mining industry was making any super profit.

Presently, the royalty rate for iron ore and chromite has been pegged at 10% of sale price on ad valorem basis while for manganese ore, it is 4.2% of the sale price. For bauxite, the royalty stands at 0.5% of the aluminium metal price on the London Metal Exchange. For F Grade coal, the royalty is determined by the formula- a+bp where a= INR 55, b= 5% and p being the pithead price of coal.

The state government had also demanded that coal royalty be fixed at 20% of market price of the dry fuel. This would help the state garner INR 1,600 crore to INR 17,000 crore per annum by way of coal royalty instead of INR 900 crore under the current royalty formula.

(Sourced from BS)