Panel favours profit share in mines

A group of ministers today approved a draft mining bill that will make miners share 26 per cent of their profits with the local people.“All our suggestions have been by and large approved,” mines minister B.K. Handique told reporters today after the GoM (group of ministers) meeting chaired by finance minister Pranab Mukherjee.The draft bill will amend the existing Mines and Mineral Development and Regulation Act, 1957 and seeks to improve the conditions of tribals, who are affected the most by mining projects.

Large-scale Maoist insurgency in the mineral-rich districts in eastern and central India — there is a heavy concentration of tribals in these regions — has forced the government to rethink its development policies and laws.“People need to be compensated, that is widely accepted. Most mining areas are remote and backward. And sharing profits would empower them to integrate at their own pace,” Handique had told a conference of miners on Wednesday.

In the draft of the bill, the mines ministry has proposed a fund — a district mineral foundation — from the miners’ profit to be used for local development.If a mine shuts down or runs into losses, firms should compensate the displaced by an amount equal to the royalty they give to state governments.

Curbs on state PSUs

The draft has provisions to dilute the rules that allow the preferential allotment of mines to state-run firms.Barring some exceptional cases, PSUs will have to bid along with private firms for mineral resources .This has been done as state-run units, in many cases, have later leased out, or entered into joint ventures, with private firms to develop the allotted mines.

States are the biggest culprits in taking advantage of the existing MMDR Act’s provisions to sign deals with private firms under “special reasons”.

The amended mining bill is likely to be brought before Parliament during the winter session.

Industry concern

The Federation of Indian Mineral Industries (Fimi) had earlier opposed the new amendments and called for spending part of the royalty they paid to states for the development of the local people.

Siddharth Rungta, president of Fimi, said during Wednesday's conference that the amendments “could provide an incentive to people to remain unproductive as they would get regular income without doing any work.”Miners in recent years have made huge profits and cut employment as metal prices zoomed globally and new capital intensive practices reduced the need for labour.

However, sources alleged that the miners had to share part of their profit with Maoist groups. Besides Mukherjee and Handique, the group of ministers comprises home minister P. Chidambaram, Virbhadra Singh (steel), V. Moily (law), Anand Sharma (commerce), K. Bhuria (tribal affairs), Sriprakash Jaiswal (coal), Jairam Ramesh (environment) and Planning Commission deputy chairman Montek Singh Ahluwalia.