New Delhi, Nov. 18 -- India's push to rewrite iron ore mining auction rules has hit unexpected turbulence, with two major mineral-producing states warning the reforms could drain their revenues.

Odisha and Goa have opposed the Centre's proposal to cap royalty premiums, saying the 50% ceiling could cut their iron ore earnings by half. Odisha alone collected nearly Rs.50,000 crore in royalties and auction proceeds in FY22, and both states fear the cap would severely weaken their fiscal position.

This assumes significance because auction premiums have emerged as one of the biggest revenue lifelines for mineral-rich states, and any cap would fundamentally reshape how money flows from future mining auctions. A 50% ceiling would sharply reduc...