Union cabinet approves Mining Bill
The Union cabinet on Friday approved the new mines Bill which provides for the first time, sharing of profit and royalty with project-affected people. The profit sharing formula is expected to smooth out the process of land acquisition.delhi Updated: Oct 01, 2011 02:16 IST
The Bill is likely to be tabled in Parliament in the winter session. Under the Bill, coal mining companies will now have to share 26% profit from mines with people impacted and displaced by projects. In case of non-coal miners, the new law will provide for the payment of an amount equivalent to royalty paid to state government to project-affected persons.
"All coal mining companies have to share 26% of their profits," said coal minister Sriprakash Jaiswal.
In the wake of the profit-sharing clause, the shares of India's largest coal producer Coal India fell by over 5% even as some state governments believe the measures are half hearted.
The Bill originally extended profit sharing for non coal mining companies as well but it was subsequently deleted as SAIL and Tata Steel raised objections.
Iron ore mining by SAIL and Tata is an integrated operation and the companies do not maintain separate accounts for it.
"We had asked for much more than what has been announced today," said Naveen Patnaik, chief minister, Orissa, one of the most mineral rich states in the country.
"This will make mining unattractive for organised investors including foreign investors," said Rajiv Kumar, secretary general, FICCI.