GoM agrees on miners sharing 26 per cent profits with locals

The sources said the GoM discussed the issue of sharing equity and explored other options based on feedback from the industry. Miners have consistently claimed that mandatory sharing of 26 per cent profits will render their operations unviable. The sources said that the profits would be distributed to the affected people every year through the district administration.

The profit-sharing proposal had earlier faced severe objections from several ministries and the industry lobby. At today’s meeting,however,Finance Minister Pranab Mukherjee,Home Minister P Chidambaram,Law Minister M Veerappa Moily and Environment Minister Jairam Ramesh strongly backed the proposal,saying that the local communities had a strong stake in the natural resources available on their land and must be given a share in the profits accruing from the exploitation of these resources. The draft MMDR Bill also proposes to do away with the concept of prior approval by the Centre on grant of mining leases. State governments have often blamed the Centre that the latter could have better informed the state if it had issues with the grant of lease to some party. The Ordinance now puts the onus on the states to ensure that leases are granted only to deserved parties.

The proposed law has a provision for reservation of certain mining blocks for public sector mining companies but such reservation would remain only for ten years after which the mining block would be put on auction afresh.