Mining in emerging economies: sharing the spoils
The proposed hike in royalty across major minerals, including iron ore, is likely to burden the industry as well as result in the rise of cost of production per tonne of steel. A panel formed to review mining royalties has recommended that iron ore royalty rates should be raised to 15 per cent from 10 per cent. As a result, the additional burden for steel mills would be in the range of Rs 500-700 per tonne in their cost of production, Ernst & Young, the research firm said. In a report, 'Mining in Emerging Economies - Sharing the spoils', released at the fourth international conference on mining, organised by the Federation of Indian Mineral Industries (Fimi), EY said, steel and mining companies are already feeling the heat of the economic slowdown and is hurting their revenues. The mining firms are paying 10 per cent royalty on the mineral they extract.