Miners fight against royalty

“The ground situation in India is not favourable for an ad valorem royalty rate on minerals primarily iron ore. We are opposed to it. The government should rather increase the royalty in the prevailing system,” FIMI President Rahul Baldota said.

“As a concept FIMI welcomes ad valorem royalty,” but its implementation part would hit the miners hard. If the government implements it, the merchant miners won’t be able pass the cost to the end users, Baldota told reporters here.

Explaining the ground realty, FIMI Secretary General R K Sharma said, “The government should first do away with the 20 per cent rate charged by the state governments on the value of a mineral, on which later the royalty is levied. All this adds a lot of pressure on the mining firms.” 

Baldota said in the ad vlorem royalty system the miners would have to pay the sum in advance on an “ad hoc basis” as the state agency, Indian Bureau of Mines, would take three to four months in computing the actual rate of the mineral for a said month.

“So this becomes a bottleneck, mainly in case of claiming refunds when the rate given by them is lower than what the miners have already paid,” he added.