Royalty Rates of Minor Minerals in Kerala: A Historical Perspective from 1967

Interesting Facts about Royalty of Minor Minerals in Kerala

Ordinary earth was classified as a minor mineral when the KMMC Rules, 1967 were enacted. Later, it was removed from this classification in the year 1977. Later it was classified as minor mineral in the year 2012.
For granite (building stone) and other minerals, royalties were specified per tonne as well as per cubic meter until March 31, 2023. From the royalty rate schedule, it is observed that the specific gravity of granite (building stone) was initially taken as 1.8 during earlier periods, later increased to 2, and then to 2.5.
Starting from April 1, 2023, the royalties for all minor minerals (except Granite Dimension Stone) are specified per tonne.
The royalty rates for all minor minerals remained the same for 17 years, from 1997 to 2015.
The average annual increase of royalty is Rs. 1.22 per year.
The percentage increase of royalty varied from 50% to 300% for granite (building stone).

The evolution of India’s mineral policy began with the Mineral Policy Conference held in 1947. This led to the enactment of the Mines and Minerals (Regulation and Development) Act, 1948, which was the first legal framework in independent India for regulating and developing mines. The adoption of the Constitution of India on January 26, 1950, which defined the legislative powers of the Union and State Governments, significantly impacted mineral policy.

The Seventh Schedule of the Constitution, under Entry 54 of List I, empowered the Central Government to regulate mining activities and the development of minerals, while Entry 23 of List II granted the State Government powers subject to List I. This framework resulted in the enactment of the Mines and Minerals (Regulation and Development) Act, 1957. Consequently, State Governments were required to frame rules for the regulation and development of minor minerals.

States such as Tamil Nadu and Rajasthan enacted their minor mineral rules as early as 1959, whereas Kerala introduced the Kerala Minor Mineral Concession Rules in 1967.

Kerala is endowed with various minor minerals, including granite (building stone), laterite (building stone), ordinary sand, ordinary clay, granite (dimension stone), and ordinary earth. Historically, granite (building stone) has been the major minor mineral extracted in the state. This paper will focus on the revision of royalty rates concerning granite (building stone). Previously, royalty rates were set based on both the weight (in tonnes) and the volume (in cubic meters) of the mineral.

The royalty fixed by the State for the first time in 1967 is given below:

It is pertinent to note that ordinary earth was included as a minor mineral under item number 2. Item number 3, building stones, included laterite as well as road metal, metal for concrete, and all other minor minerals. Interestingly, road and concrete metals were classified as minor minerals.

In 1973, item number 1 of Schedule I was amended to incorporate different types of lime shells such as white lime shell, black lime shell, drift lime shell or seashell, and shell of oyster.

In 1977, the ordinary earth was removed from the list of minor minerals and the term “granite” was introduced under item number 3 of minor minerals.

In the year 1985, the royalty rates were revised, and the rates were doubled as follows:

In 1989, the royalty rates were again revised.

In addition, in the year 1989, new two types of minor minerals were introduced namely, black granite and other types of granites used for decorative and ornamental purposes.

In the year 1992, the royalty rates were again revised as follows:

The term granite was changed and all rocks other than those used as dimension stone were classified as a separate type of mineral. The term laterite remined same since 1967.

Next revision took place in 1997 and only the rates were changed:

On 17.11.2012 the ordinary earth was included as minor mineral and the royalty of the same was fixed as follows:

Next revision took place after a long gap of 17 years (5.1.2015) and the hike of royalty of granite building stone was only 50% unlike 100% hike made during the previous revisions.

On 7.2.2015, the KMMC Rules 1967 was repealed and new KMMC Rules 2015 came into existence. In the new KMMC Rules 2015, royalty schedule was modified. Since the previous royalty revision took effect a month ago, there was no hike in royalties but the laterite was renamed as laterite (building stone).

On 22.6.2017, four new minerals were added to the Schedule I and the term “granite (building stone)” was introduced instead of “All those group of rocks specified in classification in sub-item (ii) of rule 18” the royalties were fixed as follows: