New Mines Bill provides for profit sharing

Source: BL

Benefit-sharing with project-affected communities may soon become a reality in the Indian mining industry. A new Mines Bill that provides for profit and royalty sharing by mining companies with project-affected people was introduced in the Lok Sabha on Monday.

The mining industry, which has been opposing such a provision, may have to incur an additional burden of Rs 10,000 crore, once the Bill is enacted into law.

The Minister of State for Mines, Mr Dinsha Patel, introduced The Mines and Minerals (Regulation and Development) Bill, 2011 that seeks to replace a 54-year-old law of the same name.

As per the provisions of the new Bill, coal and lignite companies will have to pay an amount equal to 26 per cent of their previous year’s profit from mining operations to the District Mineral Foundation for the welfare of the project-affected people.

The non-coal mineral firms which mine iron ore and bauxite will have to pay an amount equivalent to the royalty paid for the financial year for community benefit plans.

Simple mechanism

The Bill provides for a simple and transparent mechanism for grant of mining lease or prospecting licence through competitive bidding in areas with known mineral deposits and on the first-in-time in areas where mineralisation is not known.

Under the current law, mineral concessions are granted by State Governments on a first-come-first served basis.

It also enables advanced technology adoption for exploration of deep-seated and concealed mineral deposits and empowers State Governments to cancel the existing concessions to prevent illegal and irregular mining.

The new Bill enables registered co-operatives for obtaining mineral concessions on small deposits in order to encourage tribals and small miners to take up mining operations.

Besides, it empowers the Central Government to institute a statutory mechanism to promote scientific and sustainable mining, set up National Mining Regulatory Authority to advise Government on royalty rates, benefit sharing, conduct investigation and launch prosecution in cases of large scale illegal mining. It also provides for better regulation and has punitive provisions to prevent illegal mining.

Special courts

The Bill provides for setting up special courts at the State level for speedier disposal of cases relating to illegal mining. It also empowers the Central Government to intervene and act against illegal mining besides providing for stringent punishment for contravention of certain provisions of the proposed legislation.

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