Tata Sponge Iron Ltd is likely to raise its product prices in the coming days following a revision of mining royalty rates. Royalty rates for iron-ore mining have been revised to 15 per cent, from 10 per cent.

According to DP Deshpande, MD, Tata Sponge Iron Ltd, the upward revision in royalty charges will lead to increased production costs for sponge iron units. This, in turn, is expected to lead to a price rise. The industry, he said, is in no position to absorb costs and, hence, the price rise.

“Costs are expected to go up by ₹400 to ₹500 a tonne in case of sponge iron depending on the market,” he told reporters on the sidelines of a Manufacturing Conclave organized by the Confederation of Indian Industry (CII). Similarly, iron ore mining costs are expected to move up too.

“We will have to take a call soon on increasing prices,” he added. Currently, sponge iron prices vary between ₹21,600 to ₹22,000 per tonne, depending on the market.

Forest clearance Meanwhile, responding to specific queries Deshpande said the company will shortly look to apply for forest clearances with the Ministry of Environment and Forests.

The Delhi High has recently allowed the company to continue with the process of obtaining the mandatory clearances (for mining at Talcher in Odisha) while the issue of validity of the de-allocation of the coal block is still decided.

Coal blocks allocated to the company had been listed for de-allocation earlier by the Coal Ministry.

“We have got some of clearances, be it the prospecting licence or the forest divergence licence or rehabilitation of displaced people. We will look to re-apply for the forest environmental clearances now,” the Managing Director said.

Shares of Tata Sponge closed at ₹849.45, down by 0.74 per cent, at the BSE on Friday.

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