For non-coal firms, amount will be equivalent to their royalty
The Union Cabinet on Friday approved the landmark Mines and Mineral Development and Regulation (MMDR) Bill, 2011 that provides for mining companies to keep aside 26 per cent of their net profits for a Mineral Development Fund to be used for the development and rehabilitation of project-affected people in tribal areas. For the non-coal companies, the amount will be equivalent to the royalty they pay.
The Cabinet, under the leadership of Prime Minister Manmohan Singh, also approved measures to tackle illegal mining and appointed a regulatory body for overseeing the functioning of the mining sector. The Bill is likely to be introduced in the winter session of Parliament.
Union Minister of State for Mines Dinsha J. Patel told reporters that in the case of non-coal miners, the new law will provide for payment to project-affected people of an amount equivalent to the royalty paid to the State government.
“The regulatory body, proposed to be set up under the new mining law, will have powers to investigate and prosecute the offenders,” Mines Secretary S. Vijay Kumar said. The authority would also be empowered to look into the cases of organised illegal mining.
The approval of the Bill immediately drew sharp reactions from the industry chambers and organisations which termed it “unviable” and a move that would hamper the development of the mining sector.
The mining company stocks also took a beating at the exchanges after the Cabinet's approval.
The MMDR Bill will replace a 54-year-old legislation governing the sector. The Bill seeks a complete and holistic reform in the mining sector with provisions to address issues relating to sustainable mining and local area development, especially families impacted by mining operations.