The government has notified amendments to the Mineral Concession Rules to provide a methodology for calculating the average sale price (ASP) of low-grade haematite iron ore, including Banded Haematite Quartzite (BHQ) and Banded Haematite Jasper (BHJ), according to a statement by the Ministry of Mines on Tuesday, 14 April.
The Ministry of Mines notified the Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession (Third Amendment) Rules, 2026 on 10 April.
The amendment introduces a framework for publishing ASP for iron ore with iron (Fe) content below the threshold value of 45%.
The threshold value of a mineral refers to the limit below which the material obtained after mining can be discarded as waste, with the notified threshold for haematitic iron ore set at 45% Fe (minimum).
The ministry noted that large quantities of iron ore below this threshold exist in the country, including in the form of Banded Haematite Quartzite (BHQ) and Banded Haematite Jasper (BHJ), which are principal host rocks of iron ore.
With improvements in processing and beneficiation technologies, such low-grade resources have become amenable to upgrading into high-grade ore suitable for steelmaking, necessitating a policy framework to enable their economic utilisation.
Prior to this amendment, there was no mechanism to determine ASP for iron ore below the threshold grade.
Instead, the ASP of higher-grade iron ore (45% to below 51% Fe) was used, making beneficiation of low-grade ore economically unviable.
Under the revised rules, ASP for iron ore with 35% to below 45% Fe content will be calculated at 75% of the ASP of 45% to below 51% grade, while iron ore with below 35% Fe content will be priced at 50% of the ASP of the 45% to below 51% grade.
The amendment is aimed at enabling the economic utilisation of such resources, addressing concerns related to depletion of high-grade iron ore and ensuring a steady supply of raw material for steel production.
The rules also clarify that in cases where processing of run-of-mine material leads to a decrease in economic value, royalty will be levied on lumps and fines after initial screening of unprocessed material. Run-of-mine refers to raw, unprocessed material obtained directly from mining operations.
The ministry added that the amendment will promote scientific and optimal mining practices while supporting mineral conservation and maintaining India’s self-sufficiency in iron ore.
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