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GATE 2022 MN – Question 28

Mineral Economics, Mine Planning, Systems Engineering · Mineral Economics · 1 mark · Multiple choice

A mining company produces iron ore and sells it to another company. In the sale scenario asked, royalty is based on:

  1. Ore quantity produced
  2. Ore quantity sold
  3. Produced quantity minus sold quantity
  4. Net profit

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Show answer and explanation

Correct answer: (B) Ore quantity sold

Explanation

For the commercial disposal scenario in the question, the relevant mineral quantity is the quantity sold, B; it is not a tax on net profit or on unsold-stock differences. The broader statutory liability relates to mineral removed or consumed, so this answer should not be read as exempting every non-sale removal or captive-consumption case.

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