With an aim to bring in a better legislative environment for attracting investment and technology in the mining sector, the Cabinet today approved the proposal to introduce the Mines and Minerals (Development and Regulation) Bill, 2011.
The proposed Bill will provide for sharing of profits and royalty with those affected by the project. The Bill will also have special provisions for allowing mining of small deposits in cluster, where cooperatives can apply. Besides, the States may set up a minimum floor price for competitive bidding.
The Bill also provides that the States may call for applications in notified areas of known mineralisation for prospecting based on technological knowledge, value-addition, end-used proposed ore-linkages etc and invite financial bid.
Speaking to newspersons after the Cabinet meeting, the Minister of State (Independent Charge) for Mines, Mr Dinsha Patel, said, “for the purpose of sharing the benefits of mining with persons or families having occupation…traditional right in mining areas, and for the local area infrastructure, creation of an amount equal to royalty in case of mineral other than coal.”
For coal mining companies, 26 per cent of net profits will have to be shared. This will be credited each year to district level mineral foundation, he said.
He said that the approval is to introduce the MMDR Bill, 2011, in terms of National Mineral Policy, 2008, and also to repeal the existing Mines and Minerals (Development and Regulation) Act, 1957.
The Bill also stipulates imposition of cess – 10 per cent to State Governments and 2.5 per cent to the Centre on the total royalty paid. The Bill also provides for punitive provisions to prevent illegal mining.
On whether the mining companies will have to invest in development of ancillary units in the area for generation of employment, the Mines Secretary, Mr S. Vijay Kumar, said, “Whether or not to do value addition is an entrepreneurs decision. However, the States are entitled to optimise their resources.”
States may grant direct mining concessions through bidding based on a prospecting report and feasibility study in the notified areas where data of minerals are adequate for the purpose, according to the Bill.
Cabinet and CCEA meeting could not take place last week as both the Prime Minister and Finance Minister were out of the country.