The Indian government plans to change the pricing structure to determine the average selling price of metallurgical grade bauxite in order to attract the private sector. In the current situation, states are unable to auction existing bauxite ore because companies find the selling price of the raw material unfeasible.
According to an official report, the Ministry of Mines has also agreed to change pricing by amending the Mining Act.
Many companies and industry associations will jointly revise the conversion factor to obtain an average selling price for metallurgical bauxite. The proposed revised conversion factor of 4.23% will rationalize the ASP calculation for metallurgical grade bauxite.
The decision is in line with previous statements by the Ministry of Mines that the ASP found through the conversion factor is much higher than the actual price of bauxite.
The ministry said: “According to the committee’s report, after taking into account the logistical costs of transporting the ore from the mine to the plant and the contribution to royalties, DMF (District Mineral Foundation) and NMET (National Mineral Exploration Trust), it is proposed to revise the conversion factor based on the LME (London Metal Exchange) aluminum price for fiscal year 2020-21 to arrive at ASP for metallurgical grade bauxite.
The Ministry added that the mineral concession provisions will be modified as necessary “to provide that whenever the conversion factor is modified, the modified conversion factor will apply to all MLs, whether auctioned before or after the modification of the conversion factor, for minerals removed or consumed from the leased area after the modification.”
Post time: Aug-03-2022