Orissa has more than 35% of India’s iron ore reserves. Considering the potentially huge amount of money to be made not just benefitting a small group of private mining companies, the Chief Minister of Orissa has asked the Indian Prime Minister to impose a mineral resource rent tax on iron ore. According to his suggestion the levy should be fixed at 50% of the surplus rent.
The current high demand for iron ore by the steel industry induced increased pressure on the Indian Government to keep resources in the country. Thereby, to discourage the shipping of the product elsewhere the government has raised export taxes considerably. The State Government is keen to see natural resources being kept at home and suggested that India adopts a similar levy to the controversial Australian Mineral Resource Rent Tax of 30%, with effect from July 1, 2012.
