New Delhi, April 18: An inter-ministerial group constituted to suggest measures for checking steel prices, has recommended a 10% export duty on steel and 15% on iron ore.

The report will be submitted to PM Manmohan Singh before the meeting of cabinet committee on prices. It is learnt that the proposal has got the approval of FM P Chidambaram who has been insisting on a revenue-neutral scheme to control steel prices.

The government, it is learnt, is also going to increase the royalty on minerals including iron ores. According to a source, the royalty on iron ore will be ncreased from the present rate of Rs 4-Rs 27 per tonne, depending on the iron content, to 10% of the sale price on ad-valorem basis.

As the prices of iron ore has gone up to Rs 4,500 ($110 per tonne) to Rs 6,000 per tonne ($150 per tonne), the proposed new rate will make the miners pay around Rs 450 to Rs 600 per tonne. However, a senior official said the present rate was based on $70 per tonne of iron ore, which was prevailing around a year back. But as the prices have doubled since then, the proposed rate of royalty is viewed inadequate by many sections in the government.

Royalty on minerals is payable to state governments by mining leaseholders. As per the provision of mines and mineral (Development & Regulation) Act 1957, the rates of royalty can be enhanced once in three years. The rates were revised on October 14, 2004. So, the next revision is due now.

The government had constituted a study group under the chairmanship of additional secretary (mines) with the representatives of state governments, ministry of steel, department of atomic energy and others as members. Based on its recommendation, the government is taking a final decision. This will discourage export of the raw materials and will help the domestic industry in long run.