In the first year, trading through the exchange will be optional, though it may become mandatory eventually, sources said. Yogesh Kale, chief controller of mines at IBM, confirmed that both the IBM and the ministry of mines are finalizing the rules.The idea is to establish a price discovery mechanism for minerals, similar to the LME. Depending on the exchange’s regulations, even retail investors could potentially participate in trading.The ministry of mines first proposed mineral and coal exchanges last year. In October, IBM was made the regulating agency for the exchanges. For coal exchange, the controller of coal’s office was made the regulator.IBM expects clearance for the rules soon. The draft covers key operational aspects, including warehousing, delivery mechanisms, settlement systems, and compliance with the Securities and Exchange Board of India (Sebi) regulations. Officials indicated that all exchanges operating in India would eventually launch a mineral trading platforms. The exchanges are expected to reflect realistic prices based on demand and supply. Currently, rates are derived from returns submitted by miners to the IBM, which then calculates a weighted average to set the base price for royalty calculations.
