By Our Correspondent
NEW DELHI/BHUBANESWAR: Union Minister of Coal, Mines and Parliamentary Affairs Shri Pralhad Joshi in a written reply in Lok Sabha on Wednesday said as per Section 9 of the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act, 1957), every mining lease holder needs to pay royalty for major minerals removed or consumed as per the royalty rates specified in the Second Schedule of the MMDR Act, 1957. The royalty rates of minerals specified in the Second Schedule of the MMDR Act, 1957 are at Annexure.
The rates of royalty on minerals are revised from time to time under sub-section (3) of Section 9 of the MMDR Act, 1957. The proviso to Section 9(3) stipulates that the Central Government shall not enhance the rate of royalty in respect of any mineral more than once during any period of three years. It does not stipulate that royalty has to be revised every three years. Royalty rates for major minerals were revised on 01.09.2014. Further, the royalty rate for mineral sillimanite was revised on 15.03.2022.
The various ways in which royalty is levied on minerals are: (i) royalty on per-tonnage basis, (ii) royalty on ad valorem basis, and (iii) royalty on the basis of percentage of London Metal Exchange (LME) price chargeable on the contained metal in ore.
Royalty of only 6 major minerals, namely Asbestos, Graphite, Limestone, Limeshell, Marl and Tungsten are payable on per-ton basis. For all other minerals the royalty is fixed on ad valorem basis or on the basis of percentage of LME price chargeable on the contained metal in ore. For these minerals, the increasing value of minerals as per the market / LME price is automatically captured as royalty is fixed as a percentage of average sale price / LME price of minerals.
The State wise royalty accrual of major minerals from 2016-17 to 2021-22 shows that the royalty accrual to the State Governments has increased over the years.
Further, through amendment in the MMDR Act on 12.01.2015, auction regime was introduced for grant of mineral concessions to improve transparency and to ensure that State Governments get a fair share of revenue in terms of auction premium in addition to royalty revenue in allocation of natural resources. Due to operationalization of auctioned mines, the revenue to the State Governments from mineral sector has increased considerably.
Rates of royalty in respect of item No. 10 relating to Coal (including Lignite) as revised vide notification number G.S.R. 349(E), dated the 10th May, 2012 read with corrigendum G.S.R. 525(E), dated the 14th June, 2012 of the Government of India in the Ministry of Coal shall remain in force until revised through a separate notification by the Ministry of Coal. Rates of royalty in respect of item No. 41 relating to Sand for stowing revised vide notification number G.S.R. 214(E), dated the 11th April, 1997, will remain in force until revised through a separate notification by the Ministry of Coal.
