Time to change: Increase in royalty rates for minerals dubbed ‘illegal’

FMOA threatens to take to the streets if royalty rates not revised.

ABBOTABAD:

Frontier Mine Owners Association (FMOA) has termed the increase in royalty rates on minerals ‘illegal’.

Speaking to journalists at his office on Thursday, FMOA President Sher Bandi Khan Marwat pressed the mineral department to review the rates saying they would otherwise take to the streets.

Through a notification issued on July 18, secretary for mineral development in Khyber-Pakhtunkhwa (K-P) increased the royalty rates for over 50 minerals extracted from mines and transported to the market from Hazara Division. The FMOA president also showed the notification to journalists.



According to the notification, the new rates will be with retrospective effect on all minerals excavated and sold from July 1. The government has started collecting Rs100 as royalty on laterite rather than the previous rate of Rs15. The royalty on phosphate has been increased from Rs60 to Rs90. The notification adds that the royalty rates for limestone have increased to Rs30 whereas the rates for granite, china clay, barite and bauxite have increased to Rs120, Rs50, Rs100 and Rs60, respectively.

Marwat claimed that the Miners Investment Facilitation Authority (MIFA)—headed by the chief minister and comprising 12 members—is legally authorised to revise the rates after thorough discussion. However, this has not been done and secretary of mineral development increased the rates in an arbitrary manner without consulting the MIFA. “No other body can revise the royalty rates,” he said.

According to Marwat, 500% increase in rates is wholly unacceptable for lease owners as it has forced them to shut down their businesses. After the notification was issued, over 60 mine owners out of 500 registered mine owners have stopped working in the mines, he added. The FMOA president believed the increase in royalty rates could render hundreds of mine workers jobless.

He accused K-P Minister for Mineral Development Ziaullah Afridi of using the increase in rates to compel mine owners to give up on their businesses.

Published in The Express Tribune, October 24^th, 2014.