Government Notifies Pricing Norms For Low-Grade Iron Ore

17 Apr 2026 CW Team

The amendment sets out, for the first time, a methodology to determine the Average Sale Price or ASP of ore below the threshold grade of 45 per cent iron content. Previously the ASP of higher grade ore in the 45–51 per cent band was used as the benchmark for royalty and other levies, which had made beneficiation economically unviable for lower grade material. The ministry said the distinct framework should make processing commercially feasible by providing clearer pricing signals.

Under the revised rules the ASP for ore with 35–45 per cent iron content will be fixed at 75 per cent of the ASP of the 45–51 per cent grade, while ore below 35 per cent will be priced at 50 per cent of that benchmark. The change is expected to reduce royalty and premium burdens on low-grade material and to incentivise beneficiation and value addition. Officials noted that advances in beneficiation technology have increased the scope to upgrade large volumes of previously underutilised deposits into feedstock for steelmaking.

In a clarification the rules state that if processing of run-of-mine material results in a decrease in economic value then royalty will be chargeable on lumps and fines after initial screening of unprocessed run-of-mine. The term run-of-mine refers to raw unprocessed material obtained after blasting or digging from a lease area and such material is required to be processed to increase mineral concentration and remove impurities. The amendment clarifies that economic value cannot be lowered in the name of processing and that the framework aligns with efforts to ensure a steady supply of raw materials to the steel industry.

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The Centre has notified a formal pricing framework for low-grade haematite iron ore, including banded haematite quartzite and banded haematite jasper, to make beneficiation viable and expand usable supply for the steel sector. The change follows an amendment to the Mineral Concession Rules notified by the Ministry of Mines on 10 April 2026. The policy aims to reduce dependence on depleting high-grade deposits and support mineral conservation. The amendment sets out, for the first time, a methodology to determine the Average Sale Price or ASP of ore below the threshold grade of 45 per cent iron content. Previously the ASP of higher grade ore in the 45–51 per cent band was used as the benchmark for royalty and other levies, which had made beneficiation economically unviable for lower grade material. The ministry said the distinct framework should make processing commercially feasible by providing clearer pricing signals. Under the revised rules the ASP for ore with 35–45 per cent iron content will be fixed at 75 per cent of the ASP of the 45–51 per cent grade, while ore below 35 per cent will be priced at 50 per cent of that benchmark. The change is expected to reduce royalty and premium burdens on low-grade material and to incentivise beneficiation and value addition. Officials noted that advances in beneficiation technology have increased the scope to upgrade large volumes of previously underutilised deposits into feedstock for steelmaking. In a clarification the rules state that if processing of run-of-mine material results in a decrease in economic value then royalty will be chargeable on lumps and fines after initial screening of unprocessed run-of-mine. The term run-of-mine refers to raw unprocessed material obtained after blasting or digging from a lease area and such material is required to be processed to increase mineral concentration and remove impurities. The amendment clarifies that economic value cannot be lowered in the name of processing and that the framework aligns with efforts to ensure a steady supply of raw materials to the steel industry.

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