New Delhi: The Ministry of Mines amended the Mineral concession rules to introduce a clear method to calculate the average sale price of low-grade iron ore, including BHQ and BHJ.
The Ministry notified the Minerals Concession (Third Amendment) Rules, 2026 on April 10. These rules define pricing for haematite iron ore below the 45% iron threshold. Earlier, no separate method existed for such grades.
Officials said the absence of a pricing system made beneficiation uneconomical. Companies paid royalty based on higher-grade iron ore prices. As a result, industries avoided using low-grade resources.
The new rules set clear pricing bands. For iron content between 35% and below 45%, the ASP will be 75% of the benchmark grade. For iron content below 35%, the ASP will be 50% of that benchmark.
Mineral concession rules boost use of low-grade iron ore
The amendment aims to increase the use of low-grade iron ore. Officials said the country holds large volumes of such material. Much of it exists as Banded Haematite Quartzite and Banded Haematite Jasper.
However, improved beneficiation technology now allows conversion into usable high-grade ore. Therefore, the revised pricing framework will encourage processing and wider utilisation.
The Ministry said the move will support mineral conservation. It will also reduce pressure on high-grade reserves. At the same time, it will ensure steady supply for the steel industry.
In addition, the amendment clarifies royalty rules for run-of-mine material. If processing reduces economic value, authorities will charge royalty on lumps and fines after initial screening. This step prevents misuse of processing claims.
Officials explained that run-of-mine refers to raw mineral extracted from the earth. It requires processing to remove impurities and improve quality. Thus, the rule ensures that companies do not reduce its value artificially.
The government said the changes will promote scientific mining practices. It added that the revised Mineral concession rules will help maintain long-term self-sufficiency in iron ore.
