India’s Steel Ministry is looking to align industry mining practices with globally accepted regulations, as India seeks to become the world’s steel superpower by the year 2030. Over the course of discussions towards the forming of a new Minerals Policy, the Indian steel ministry has proposed renegotiation of royalty rates on iron ore mining, the creation of special mining zones and the streamlining of transport corridors to lessen the burden of logistics needs. The Indian Steel Ministry has said that implementing a rational new tax regime coupled with new royalty rates could catapult the Indian Steel Sector to a globally competitive position. Citing the example of royalty rates in other iron-ore producing countries like South Africa, where the royalty for refined materials ranges from 0.5-5% and 0.7 to 7% for unrefined materials. Comparatively, India royalty is levied at a fixed 15% for fines, lumps and concentrates.
Besides lobbying for lower royalty costs, the Steel Ministry is also advocating long-term links between mines and steel producers. Long-term supply contracts could protect steel producers from losses through price fluctuations while the mines would have the guarantee of stable cash flow, which would help with plans for mine expansion. The proposal for special mining zones will designate certain pre-determined geographical areas where each miner will possess a freehold area.
Agni Steels is a supporter of policies that seek to elevate the Indian steel sector’s status on the global level, while also creating an environment for domestic players to succeed at home.
