FIMI : Iron ore royalties to be linked to price
"The Central government plans to link royalties on iron ore to market prices rather than a fixed rate", Mines Minister B K Handique said on Monday. The move may increase costs. The minister didn't indicate a level for the royalty, but Secretary General of Federation of Indian Mineral Industries (FIMI) R K Sharma said it was likely to be 10 percent of the sale price before freight.
Sharma, who was a part of a panel in 2007 that submitted recommendations on a new royalty system to the government, said at today's sale price - around $15 per tonne without freight – royalty would work out to about Rs73 a tonne compared to Rs27at present.
FIMI data shows iron ore exports in2008/9 year were at 105.76 million tonnes, up 1.4 per cent from a year earlier. Prices are currently $56 to $58 a tonne FOB, induding road and rail transportation costs.
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