The government intends to convert the draft Mines Bill into legislation soon for the benefit of the country’s tribal community, Prime Minister Manmohan Singh said on Wednesday.
“The Government wants to speedily convert the Mines and Minerals (Development and Regulation) Bill into a legislation,” Dr. Singh said in the Independence Day speech.
“Through this law we want to provide funds for the benefit of our tribal brothers and sisters in the mining areas,” he added.
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A ministerial panel on mine had in September last year unanimously approved the draft Mines and Mineral Development and Regulation (MMDR) Bill, 2011 obligating coal miners to share 26 per cent profit; and non-coal miners, 100 per cent royalty with project-affected people.
It would replace the 54-year-old legislation governing the sector. The changes in the Bill were required as the existing ones did not provided a fair deal to those affected by the mining projects.
Country’s largest coal producer Coal India Ltd is expected to get impacted because of the legislation. Its net profit is likely to be impacted by a little over Rs 2,000 crore a year, considering the bottomline of the company remains at the current level.
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According to miners body, Federation of Indian Mineral Industries, non-coal miners’ bottomline might shrink by around Rs 10,000 crore as a fallout of 100 per cent royalty sharing provision made in the proposed Bill.
Royalty to be paid to the state governments by the miners differs from one mineral to the other. For iron ore, which is the third highest mineral mined in the country after petroleum crude and coal, value-wise, 10 per cent of the sales value at the minehead is charged as royalty.
The total value of mineral production, excluding atomic minerals, in 2010-11, was estimated at Rs 2 lakh crore. India produces as many as 87 minerals.