State to benefit from royalty hike

The Union mines ministry's revision of royalty rates on iron ore production and dead rent with effect from August 13, 2009 is expected to increase the Goa government's revenue by 103% as compared to the existing regime.
As per the notification dated August 13, 2009, rates of various minerals have been revised, but as far as Goa is concerned, mine owners would have to pay 10% of sale price on an ad valorem (according to value) basis on iron ore, be it lumps, fines and concentrates of all grades. Earlier, the royalty on ore production was collected on the basis of per tonne.
"The lowest royalty paid ranged from Rs 8 per tonne to the highest of Rs 17 per tonne, depending on the grade of the ore," sources said, adding that the valuation was based on grade of ore sold and not on quantity of sale at the site.
There were mixed reactions in sections of the industry with some saying the revision was rather stiff, but hoping collection of other taxes would be dropped and that part of the revenue from the new royalty regime would be ploughed back in improving infrastructure in mining areas.