Deputy Director of Mines (DDM) for Joda mining circle has issued notices to eight iron and manganese mines for payment of royalty dues amounting to Rs 350 crore on the basis of updated ore prices issues by Indian Bureau of Mines (IBM).
The notices for differential royalty collection were sent to Joda East Iron Ore mines (Rs 90.19 crore), Nua Gaon mines of KJS Ahluwalia group (Rs 3.32 crore), K N Ram mines (Rs 10.13 crore), Mesco mines (Rs 12.41 crore), R P Sao Guali mine (Rs 93.59 crore), Jajang mine of Rungta Group (Rs 60.66 crore), Ziling mine of Essel Mining (Rs 25.21 crore), and Kashia mine, also of Essel Mining (Rs 23.52 crore).
As per current practices, mining companies pay royalty at the time of applying permission to raise mineral, based on prevailing mineral rates. However, since IBM fixes royalty charges for a particular month retrospectively, mining circles collect the differential royalty later in case of increase in prices or adjust with next month payment in case of price fall.
Since 2009, miners have been paying royalty at 10 per cent of selling price in case of iron ore. Before that, there was a fixed rate of Rs 27 per tonne.
"Ever since the new royalty formula has come into place, we are charging royalty in advance from the miners. And four months later, when IBM updates royalty charges retrospectively, we collect the differential amount, thereby putting extra burden on our staff”, Narayan Jena, the Joda DDM said.
The recent royalty collection order has been issued for the month of March, he added.
Iron ore prices had gone up by more than seven per cent in March-April period on better international demand, but have been falling since then reacting to lower exports caused by higher export duty. In the upcoming July-September quarter, miners are expecting a price fall of 8 to 10 per cent, industry sources said.
Joda mining circle contributes the most to state exchequer in terms of mining revenue. In 2011-12, it contributed Rs 2,184 crore out of total collection of Rs 4,517 crore, mostly from iron ore and manganese exploration. Joda is the largest mining circle in terms of iron ore production in the country, with more than 40 million tonne annual output.