Mineral Royalty Rates: A Policy Review

Abstract

Mineral royalty is the economic rent due to the sovereign owner (government) in exchange for the right to extract mineral substances. The royalty may be computed on the tonnage, value or profits. India uses two types, viz., royalty based on tonnage or value. India’s mineral royalty rates are among the highest in the world, thus, impacting the competitiveness of the mining sector. The royalty payments over and above the auction premia put a heavy burden on the mining companies. Adjusting the rates in alignment with the global best practices will facilitate investment and development in the mining sector.