GoM OK8217;s 26 profit-sharing norm bill

A panel approved the new mining bill that proposes 26 profit-sharing by miners with people.

A ministerial panel headed by Finance Minister Pranab Mukherjee today approved the new mining bill that proposes 26 per cent profit-sharing by miners with the people affected by the project,Mines Minister B K Handique said today.

8220;So far the GoM Group of Ministers is concerned,it was its last meeting. All concerns have been addressed and there are no major changes,8221; Mines Minister B K Handique told reporters here after the meeting.

To address the concers of mineral rich states such as Chhattisgarh and Jharkhand,the panel asked the mines ministry 8220;to strengthen the clause on competitive bidding for prospecting and mining leases8221;,ministry sources said.

States have opposed a provision of the bill,which says that first come first serve route will be adopted for granting large area prospecting licences LAPLs instead of competitive bidding method.

The LAPLs allow companies to prospect for mineral deposits in large tracts of land 5,000 sq km and above for eight years.

Mines Secretary S Vijay Kumar told reporters after the meeting that 8220;section 13 of the proposed bill says that whereever there is mineralisation,the area will have to be notified and bid for. That is the ruling provision.8221;

He added that 8220;most of the issues raised by the state governments have been discussed and there is a broad consensus on what needs to be done.8221;

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When asked about the clause of 26 per cent profit sharing by miners with the people affected by their projects,the Mines Minster said that 8220;yes,it remains. it was the view of the GoM earlier also.8221;

Sources said 8220;after making necessary changes,the final draft will be sent to Finance Minister,who heads the panel,for his approval and there after it will be placed before the Cabinet8221;.

This was the fourth meeting of the GoM,constituted to iron out the differences among the ministries over the profit sharing formula in the new legislation 8212; Mines and Mineral Development and Regulation Act MMDR Act,2010.

Besides Mukherjee,the 10-member GoM consists of Home Minister P Chidambaram,Steel Minister Virbhadra Singh,Law Minister V Moily,Mines Minister B K Handique,Commerce Minister Anand Sharma,Tribal Affairs Minister K Bhuria,Planning Commission Deputy Chairman Montek Singh Ahluwalia,Environment Minister Jairam Ramesh and Coal Minister Sriprakash Jaiswal.

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The new bill has proposed that a fund 8212; District Mineral Foundation 8212; be created and the beneficiaries be paid out from it.

Besides,it proposes that in case of a mine being non-functional or in losses,the firms should compensate the people affected by land acquisition,by paying them amount equal to the royalty given to state governments.

However,the industry opposed the profit sharing proposal and had said that if enacted it would choke investments and doom the industry.

8220;Foreign investment of USD 270 million over Rs 1,200 crore in the sector have already gone waste and 26 per cent profit sharing clause with the affected will prove a further deterrent,8221; Federation of Indian Minerals Industries FIMI had said.

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Major steel players,including Tata Steel and Jindal Steel,have also opposed the profit sharing formula and have demanded that instead,it be shared on the basis of operational cost.