The chamber Secretary General D.S. Rawat said, "Setting up an integrated steel plant and development of mining projects are high risk investments as they have a long gestation period and require large investments in exploration and other development activities before commercial production can begin. Therefore, the Steel industry should be incentivized by ensuring the availability of secure supply of raw material at appropriate price."
royalty on iron ore, until August 2009 was based on Rs/ton basis;
subsequently the rates were changed to 10% of sales price. Prior to
the changes, royalty was in the range of Rs.8 to Rs. 27 per ton,
depending upon the quality of iron ore.
Rawat said, India is the highest taxed country amongst major iron ore producing regions with the proposed royalty rates. Brazil, the largest iron ore producer with a domestic steel production comparable to India, has a royalty of 2 per cent.
Australia has a royalty of 2.7 to 7.5 per cent (depending on ore
type). Even South Africa has a royalty of only 3 per cent and,
therefore, there is strong case for not further burdening the
industry and consumers to add avoidable inflation.