The government on Tuesday revised pricing norms for low-grade iron ore to promote its utilisation and reduce wastage, as it seeks to ensure steady raw material supply to the steel industry amid concerns over depletion of high-grade reserves.

The mines ministry notified the amended rules providing a pricing framework for iron ore with iron (Fe) content below the threshold level of 45%, including Banded Haematite Quartzite (BHQ) and Banded Haematite Jasper (BHJ).

“The Ministry of Mines has notified the Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession (Third Amendment) Rules, 2026… providing the methodology for publication of average sale price (ASP) of Haematite Iron Ore below the threshold value,” the ministry said in a statement.

Revised norms

Under the revised norms, the average selling price (ASP) for iron ore with 35% to below 45% Fe content will be fixed at 75% of the ASP of 45% to below 51% grade ore. For ore with Fe content below 35%, the ASP will be 50% of the same benchmark.

The threshold value refers to the minimum grade below which mined material is typically treated as waste. However, advances in beneficiation technologies have made it possible to process low-grade ore into usable material for steelmaking.

Prior to the amendment, there was no separate pricing mechanism for such low-grade ores. As a result, the ASP of higher-grade ore was used for royalty and levies, making beneficiation economically unviable.

The ministry said the revised framework addresses this anomaly and creates incentives for scientific utilisation of low-grade resources.

“Bringing low-grade resources into the usable category will address the concern of depletion of high-grade iron ore resources and will lead to a steady supply of minerals to the steel industry,” it said.

The government added that the move will support mineral conservation and promote optimal mining practices.

“Utilisation of low-grade iron ore resources will be in the interest of mineral conservation as well as promote scientific and optimal mining of iron ore resources,” the statement said, adding that it would help the country remain self-sufficient in iron ore.

The amendment also clarified royalty calculations in cases where processing reduces the economic value of run-of-mine (ROM) ore. In such cases, royalty will be levied on lumps and fines after initial screening of unprocessed material.

The clarification ensures that mineral value is not artificially reduced through processing practices, the ministry said.

The move is expected to bring sub-threshold iron ore, including BHQ and BHJ, into commercial use, supporting long-term supply stability for the steel sector.
Source: The Financial Express