NEW DELHI, Dec 4 (Reuters) – India plans to tweak a components to repair the common home sale worth of iron ore, a key steelmaking uncooked materials, in accordance with a authorities word reviewed by Reuters and a supply with direct information of the matter.

After the Ministry of Mines identified that some iron ore miners tried to maintain the common sale worth artificially decrease to pay decrease royalties to the federal government, the federal authorities shaped a panel to work out an “alternative mechanism” to find out home iron ore costs.

“Any reduction in the ASP (average sale price) of iron ore through unscrupulous means will impact the revenue accruing to the government on account of auction premium, royalty,” the federal government word stated.

The authorities at present levies a uniform 15% royalty.

The government-appointed panel met final week, the supply stated, including that it’s particularly analyzing the present pricing mechanism adopted by iron ore producers of Odisha, Karnataka, Jharkhand and Chhattisgarh – the states which might be India’s largest iron ore producers.

The panel would work out a components that would chop the prevailing worth hole amongst top-producing states, stated the supply, who’s immediately concerned within the course of however requested to stay nameless as a result of the deliberations aren’t public.

Iron ore costs range relying on the iron content material. But the government-appointed panel believes that even costs of the identical grade of ore differ broadly, creating an anomaly and making it simpler for miners to decrease charges artificially to keep away from increased royalty funds to the federal government, the supply stated.

“Miners self-declare prices, and on that basis the weighted average price is calculated and we derive the average sale price. But we are seeing variance in these prices on the same grade of ore,” the supply stated.

The federal Ministry of Mines didn’t reply to an e-mail looking for remark.

India is the world’s fourth-biggest iron ore producer and a serious exporter of the ore to China.

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