New Delhi, April 14: In a significant move to reduce waste and enhance the utilization of low-grade iron ore, the central government has amended existing regulations. The Ministry of Mines announced on Tuesday that new pricing rules have been established for this type of iron ore.
Under the revised framework, a clear pricing structure has been created for iron ore with less than 45% iron (Fe) content, including Banded Hematite Quartzite (BHQ) and Banded Hematite Jasper (BHJ).
According to the new regulations, the average sale price (ASP) for iron ore with Fe content between 35% and less than 45% will be set at 75% of the ASP for iron ore with 45% to 51% Fe content. For iron ore with less than 35% Fe content, the ASP will be determined at 50% of the base price.
The government defines “threshold value” as the minimum quality below which mined material is generally considered waste. However, with the aid of new technologies, low-grade iron ores like BHQ and BHJ can now be processed into high-grade materials suitable for steel production.
Previously, there was no distinct pricing system for low-grade iron ores. As a result, royalties and other fees were based solely on the prices of high-grade iron ores, making processing economically unviable.
The government stated that the new framework aims to address this issue and promote the scientific and efficient use of low-grade iron ore.
Additionally, the government believes that utilizing these resources will alleviate concerns over the depletion of high-grade iron ore, ensure a steady supply of raw materials to the steel industry, and promote mineral conservation.
The new rules also clarify that if processing raw iron ore (ROM) reduces its economic value, royalties will be determined only after the initial screening of the unprocessed material. This ensures that mineral prices cannot be artificially lowered under the guise of processing.
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