The Ministry of Mines announced a rule amendment aimed at reducing wastage and boosting the use of low-grade iron ore. This change establishes new pricing norms for iron ore with less than 45% iron content, including Banded Haematite Quartzite (BHQ) and Banded Haematite Jasper (BHJ). The updated regulations set the average selling price (ASP) for ore with 35% to below 45% Fe content at 75% of the ASP for 45% to below 51% grade ore.
The ASP for ore below 35% Fe content will be fixed at 50% of the benchmark price. Previously, there was no distinct pricing mechanism for such low-grade ores, leading to the use of higher-grade ore prices for royalty and other charges. This practice made beneficiation economically unfeasible. The new framework aims to address this issue, encouraging the efficient utilization of low-grade iron ore resources.
Advancements in beneficiation technologies now allow for the processing of low-grade iron ore like BHQ and BHJ into high-grade material suitable for steel production. By bringing these resources into the usable category, concerns over depleting high-grade reserves can be alleviated. This move will ensure a consistent supply of raw materials to the steel industry and promote mineral conservation.
The amended framework also clarifies that if the processing of run-of-mine (ROM) ore reduces its economic value, royalty will be imposed after the initial screening of unprocessed material. This provision prevents the artificial reduction of mineral value during processing, according to the ministry.
