The Mines Ministry expects to send the draft mining Bill for Cabinet approval in 15 days. The new Bill seeks to introduce the concept of benefit sharing to the project-affected people.
Last week, the Group of Minister, led by the Finance Minister, Mr Pranab Mukherjee, approved the draft Mines and Mineral (Development and Regulation) Bill 2011. The draft legislation provides for 26 per cent profit sharing by coal companies and 100 per cent royalty sharing by non-coal companies with project-affected people.
“The minutes are being prepared after that we will send it to the Cabinet for approval in the next 15 days,” Mr Dinsha Patel, Minister of State for Mines, said after addressing the members of Federation of Indian Mineral Industries (FIMI).
Further, Mr Patel said the MMDR Bill 2011 would be placed in the Parliament in the forthcoming monsoon session.
Initially, the Mines Ministry had proposed the concept of 26 per cent profit sharing but eventually changed it to royalty sharing. “There were several representations on the profit-sharing clause. After consulting different stakeholders, we felt that there is a need to change that as it would have made accounting and other calculations difficult,” Mr Patel said.
However, there are unlikely to be any further changes in the draft Bill, he added.
Profitability to be hit
Mr Siddharth Rungta, President, FIMI, said the proposed benefit-sharing mechanism would further affect the profitability of mining firms, which are already reeling under the impact of increased railway freight rates and export levy.
“The 26 per cent royalty sharing would cost the industry between Rs 12,000 crore and Rs 15,000 crore,” he said.