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India Revises Iron Ore Pricing to Boost Low-Grade Ore Use, Cut Waste

The Indian government has amended mining rules to establish a new pricing framework for low-grade iron ore with iron content below 45%. The revision sets the average selling price for ore with 35-45% Fe at 75% of a higher-grade benchmark, and for ore below 35% Fe at 50%. This move is designed to correct a previous pricing anomaly that made the beneficiation process economically unviable. The policy aims to reduce waste, incentivize the use of low-grade resources like BHQ and BHJ, and ensure a steady raw material supply for the steel industry while addressing the depletion of high-grade reserves.

Key Points: Govt Amends Iron Ore Rules to Promote Low-Grade Ore Utilisation

  • New pricing for ore below 45% Fe
  • Aims to make beneficiation economically viable
  • Targets reduction of mining waste
  • Supports steel industry raw material supply
2 min read

Govt tweaks iron ore rules to boost low-grade ore utilisation

India's Mines Ministry revises pricing for sub-45% Fe iron ore to make beneficiation viable, conserve high-grade reserves, and support steel industry.

"The new framework aims to correct this anomaly and incentivise the scientific and optimal utilisation of low-grade iron ore resources. - Ministry of Mines"

New Delhi, April 14

In a move to reduce wastage and promote utilisation of low-grade iron ore, the government has amended rules to revise pricing norms for such ore, the Ministry of Mines said on Tuesday.

The amendment provides a framework for pricing iron ore with iron (Fe) content below the threshold level of 45 per cent, including Banded Haematite Quartzite (BHQ) and Banded Haematite Jasper (BHJ), it said.

Under the revised rules, the average selling price (ASP) for iron ore, with 35 per cent to below 45 per cent Fe content, will be fixed at 75 per cent of the ASP of 45 per cent to below 51 per cent grade ore.

While for ore with Fe content below 35 per cent, the ASP will be 50 per cent of the same benchmark.

Moreover, the threshold value refers to the minimum grade below which mined material is typically treated as waste.

However, with advancements in beneficiation technologies, low-grade iron ore, including BHQ and BHJ, can now be processed into usable high-grade material for steelmaking.

Prior to the amendment, there was no separate pricing mechanism for such low-grade ores.

As a result, the ASP of higher-grade ore (45-51 per cent Fe) was used for royalty and other levies, making beneficiation economically unviable, according to the government.

It further said that the new framework aims to correct this anomaly and incentivise the scientific and optimal utilisation of low-grade iron ore resources.

The government also noted that bringing such resources into the usable category will help address concerns over the depletion of high-grade reserves, ensure steady raw material supply to the steel industry, and support mineral conservation.

The amendment in the new framework has also clarified that in cases where processing of run-of-mine (ROM) ore leads to a reduction in its economic value, royalty will be levied on lumps and fines after initial screening of the unprocessed material.

The clarification ensures that the economic value of minerals is not artificially reduced under the guise of processing, the ministry said.

- IANS

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Reader Comments

P
Priya S
Finally! This was long overdue. The old pricing made it impossible for companies to invest in beneficiation plants. Now they have a clear economic incentive. Hope this leads to more jobs in mining areas like Odisha and Jharkhand.
R
Rohit P
Good step for conservation, but the government must ensure strict environmental safeguards. Processing low-grade ore requires more water and energy. We can't trade one resource for another. The monitoring has to be robust.
S
Sarah B
As someone working in the metals sector, this is a game-changer. The clarification on royalty for processed ore is crucial. It removes a major ambiguity that was holding back investment. The steel industry will breathe a sigh of relief.
V
Vikram M
Makes perfect sense. Why waste what we have? With new technology, we can use these resources. This will help control steel prices too by ensuring a steady supply of raw material. Pragmatic policy.
K
Karthik V
I appreciate the intent, but the execution will be key. The success depends on how smoothly state governments implement these central rules. Also, the 75% and 50% pricing benchmarks need to be reviewed periodically to remain viable.

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