Government proposes 50% hike in royalty on limestone produced from captive mines

New Delhi: More than a decade after it was last revised, the Centre is pushing for a 50 per cent raise in the royalty on limestone produced from captive mines while leaving the royalty rates untouched for those produced from auctioned mines.

“The royalty on LD limestone extracted from non-auctioned or captive mines is proposed to be increased to Rs 135 per tonne from present Rs 90 per tonne and on non-LD limestone to Rs 120 per tonne from Rs 80 per tonne,” said a Mines Ministry official.

LD limestone refers to low-silica (below 1.5 per cent silica) limestone and is used as a flux in the iron and steel industry, specifically in Linz-Donawitz process to remove impurities in the making of steel. Non-LD or cement grade limestone accounted for 97.2 per cent of the total limestone produced in 2020-21 of which captive mines contributed 95 percent of the supplies.

The last revision in royalty on limestone was in September 2014 even though the rules provide for increasing the royalty after every three years.

Another change proposed is to classify all limestone as major mineral. Currently limestone used for ‘industrial purposes’ fall under major minerals while those used in limekilns for ‘building purposes’ come under minor minerals category.

Several states levy high royalty on ‘minor mineral’ limestone and hence stand to lose when the mineral is shifted to ‘major mineral’ category where the Centre fixes the royalty.

“The upward revision in royalty is also being done to compensate the states for the classification shift,” the official said.

The proposed changes stem from an Inter-Ministerial Committee constituted by the Mines Ministry with representatives from Andhra Pradesh, Chhattisgarh, Madhya Pradesh, Rajasthan, and Karnataka.

The IMC, in its March 2022 report, recommended 50 per cent increase in royalty rates of non-auctioned mines of limestone, while keeping the rate unchanged for auctioned mines which already pay an average premium of Rs 213 per tonne.

Limestone is a sedimentary rock composed of calcium carbonate in the form of the mineral calcite.

Its principal use is in the cement industry with minor input in the manufacture of steel, quicklime (calcium oxide), slaked lime (calcium hydroxide), mortar etc.

Limestone output was 393 million tonnes in 2021-22, up 12.5 per cent from the previous year. There were 689 reporting mines in 2021-22 as against 665 during the previous year.