Date: 2026-04-14Category: Press ReleaseState: Union GovernmentCountry: India
Ministry of Mines notifies significant amendments to the Mineral Concession Rules providing methodology for publishing ASP of Haematite Iron Ore below the threshold value including for BHQ and BHJ
**Executive Summary**
The Ministry of Mines notified the Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession (Third Amendment) Rules, 2026, on April 10, 2026. The amendment establishes a new methodology for calculating the Average Sale Price (ASP) of low-grade Haematite Iron Ore (below 45% Fe content), including BHQ and BHJ, to make beneficiation economically viable. This policy change aims to promote mineral conservation, ensure a steady supply for the steel industry, and maintain national self-sufficiency in iron ore.
**Key Points / Main Content**
**New ASP Calculation Methodology**
* **35% to below 45% Fe grade:** The ASP is fixed at 75% of the ASP of the "45% to below 51% Fe grade" iron ore.
* **Below 35% Fe grade:** The ASP is fixed at 50% of the ASP of the "45% to below 51% Fe grade" iron ore.
* **Previous Limitation:** Prior to this amendment, the higher ASP of the 45%–51% grade was applied to all sub-threshold ores, making royalty and auction premiums prohibitively expensive.
**Scope of Minerals Covered**
* The rules apply to Haematite Iron Ore below the threshold value of 45% Fe.
* Specific inclusion is provided for Banded Haematite Quartzite (BHQ) and Banded Haematite Jasper (BHJ), which are the primary host rocks for iron ore.
**Mineral Conservation and Beneficiation**
* The amendment facilitates the use of improved processing technology to convert low-grade waste into high-grade feed for steel making.
* The policy encourages scientific and optimal mining, transforming material previously discarded as waste into usable resources.
**Provisions for Run-of-Mine (ROM) Processing**
* If processing ROM leads to a decrease in economic value, royalties remain chargeable on the lumps and fines identified after the initial screening of the unprocessed ROM.
* The rules clarify that the economic value of a mineral cannot be artificially lowered under the pretext of ROM processing.
**Impact Analysis**
**Steel Industry**
**Impact**
The industry will benefit from a more consistent and steady supply of iron ore as low-grade resources are converted into usable feed grade ore.
**Action Required**
Prepare to integrate beneficiated low-grade iron ore, such as BHQ and BHJ, into the steel-making supply chain.
**Mining Leaseholders and Operators**
**Impact**
Beneficiation of low-grade ore becomes financially feasible due to reduced royalty and auction premium costs.
**Action Required**
Calculate royalties and premiums for low-grade ore (below 45% Fe) using the new percentage-based ASP formulas and ensure ROM processing does not improperly reflect a lower economic value for royalty purposes.
**Ministry of Mines / Regulatory Authorities**
**Impact**
The amendment provides a legal framework to publish ASP for previously unlisted grades, promoting mineral conservation.
**Action Required**
Implement the methodology to publish the ASP for Haematite Iron Ore grades below 45% Fe and monitor compliance regarding ROM processing and royalty payments.
Key Entities Referenced
Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession (Third Amendment) Rules, 2026: The primary regulatory framework amended to provide a new methodology for calculating the average sale price of low-grade iron ore.
Ministry of Mines: The central government body responsible for notifying the amendments and overseeing the conservation and optimal mining of iron ore resources.
Haematite Iron Ore: The principal mineral resource impacted by the policy, specifically concerning grades with iron content below the 45% threshold value.
Average Sale Price (ASP): The pricing mechanism used for levying royalties and auction premiums, now adjusted for low-grade ores to make their beneficiation economically viable.
Banded Haematite Quartzite (BHQ) and Banded Haematite Jasper (BHJ): Specific low-grade host rocks of iron ore that are now included in the updated ASP calculation methodology for steel making.
Ministry of Mines
Ministry of Mines notifies significant
amendments to the Mineral Concession Rules
providing methodology for publishing ASP of
Haematite Iron Ore below the threshold value
including for BHQ and BHJ
Posted On: 14 APR 2026 11:10AM by PIB Delhi
The Ministry of Mines has notified the Minerals (Other than Atomic and Hydro Carbons Energy Minerals)
Concession (Third Amendment) Rules, 2026 on 10th April, 2026 providing the methodology for
publication of average sale price (ASP) of Haematite Iron Ore below the threshold value, including for
Banded Haematite Quartzite (BHQ) and Banded Haematite Jasper (BHJ).
The threshold value of a mineral is the limit below which the material obtained after mining can be
discarded as waste. The notified threshold value for Haematitic Iron Ore is 45% Fe (Min.). There are huge
quantities of iron ore below the threshold value in the country and some of which is in the form of BHQ or
BHJ, which are the principal host rocks of iron ore. With the improvement in technology for processing
and beneficiation, the iron ore resources of below threshold value, including the BHQ and BHJ, have
become amenable to beneficiation to generate high grade iron ore which can be used as feed grade ore for
steel making. In order to facilitate the beneficiation of such low-grade iron ore, a suitable policy was
required to be provided.
Before the present amendment in the rules, there was no methodology to publish ASP of Haematite Iron
Ore having Fe content below threshold value (i.e., below 45% Fe) including for BHQ and BHJ. Thus, the
ASP published for lowest grade of Haematitic Iron above the threshold value, i.e., 45% to below 51% Fe
grade, was taken as the ASP for these grades. Use of ASP of higher grade for levying royalty, auction
premium, etc. on the grade below threshold value made the beneficiation of such minerals uneconomical.
The present amendment in the rules addresses this issue. Thus, the amended rule provides that the ASP of
Haematite Iron Ore having Fe content below the threshold value will be calculated as follows:
(a) for 35% to below 45% Fe grade, the average sale price shall be equal to seventy-five per cent.
of average sale price of 45% to below 51% Fe grade of Iron Ore;
(b) for below 35% Fe grade, the average sale price shall be equal to fifty per cent. of average sale
price of 45% to below 51% Fe grade of Iron Ore.
Bringing low-grade resources into the usable category will address the concern of depletion of high-grade
iron ore resources and will lead to a steady supply of mineral to the steel industry. Utilization of low-grade
iron ore resources will be in the interest of mineral conservation as well as promote scientific and optimal
mining of iron ore resources. As a result, the country will continue to be self-sufficient in iron ore.The amendment in the rules also clarified that in case the processing of run-of-mine results in decrease in
its economic value, then royalty shall be chargeable on the lumps and fines after initial screening of
unprocessed run-of-mine. The term run-of-mine refers to raw unprocessed or uncrushed material in its
natural state obtained after blasting or digging, from the mineralised zone of a lease area. Raw
unprocessed minerals are required to be processed to increase the concentration of the target mineral,
remove impurities, and transform the material into a form that industries can actually use. The present
amendment in the rules clarifies that economic value of mineral cannot be lowered in the name of
processing of run-of-mine.
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Shuhaib T
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