India has introduced a new pricing system for low-grade iron ore

The Indian government has introduced a new pricing system for low-grade iron ore, according to The Economic Times.

This move is intended to encourage its use and aims to reduce waste, improve resource utilization, and ensure a stable supply for the steel industry.

It is expected that this, among other things, will help address the problem of depletion of high-grade ore deposits.

The country’s Ministry of Mines has amended the Mineral Concession Rules, which include a methodology for calculating the Average Selling Price (ASP) of hematite iron ore below the threshold value.

Under the revised rules, the ASP for ore with an iron content of 35% to 45% will be set at 75% of the average price of high-grade ore (45–51% Fe), and for ore with an iron content below 35%, at 50% of that benchmark.

Prior to this amendment, no separate pricing applied to such low-grade ores. The ASP rate for high-grade ore determined royalties and fees, which is economically inefficient, the ministry noted.

As a reminder, India increased its ore production by 7% year-on-year in the 2025/2026 fiscal year (ended March 31) to 310 million tons. The growth was driven by strong performance from major companies, but it remained concentrated among a limited group of them, highlighting uneven supply conditions.