The government of India is planning to change the pricing structure to determine the Average Selling Price (ASP) of metallurgical-grade bauxite, in a bid to attract private players. In the present scenario, states are unable to auction the existing bauxite mines as companies find the selling price of raw material unfeasible.
According to an official report, a change in pricing would be made by amending the mining law, as also agreed by the mining ministry.
Many companies and industry associations will jointly revise the conversion factor to obtain the Average Selling Price of metallurgical bauxite. The revised conversion factor is proposed to be 4.23 per cent, which will rationalise the calculation of ASP for metallurgical bauxite.
This decision came in line with the mining ministry's statement that the previously found ASP through the conversion factor was much higher than the actual bauxite price.
The ministry said, "Based on the report of the committee, it is proposed to revise the conversion factor to arrive at the ASP for metallurgical grade bauxite on the basis of LME (London Metal Exchange) price of aluminium for the financial year 2020-21 after factoring the logistics cost in taking the ore from the mine to the plant and the contribution towards royalty, DMF (District Mineral Foundation) and NMET (National Mineral Exploration Trust).”
The ministry added that necessary changes would be included in the mineral concession rules “to provide that whenever the conversion factor is revised, the revised conversion factor would be applicable for all the MLs, whether auctioned before or after the revision of the conversion factor, for the minerals removed or consumed from the leased area after such revision."
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