Cabinet clears new mining Bill with 26% profit sharing

A new Mines Bill that provides for sharing of profits and royaltywith project-affected people has been cleared by Cabinet, Mines Minister DinshaPatel said on Friday.

The Bill is likely to be tabled in Parliament in the WinterSession.

"The Union Cabinet today approved the Mines and MineralDevelopment and Regulation (MMDR) Bill, 2011, which has provisions for 26 percent profit-sharing by coal miners and an amount equivalent to royalty byothers with project- affected people," Patel said.

The Bill was earlier supposed to be tabled during theMonsoon Session, as a ministerial panel headed by Finance Minister PranabMukherjee had approved it in July.

As per the provisions of the Bill, coal mining companieswill have to share 26 per cent of the profits from their mines with peopleimpacted by projects.

In the case of non-coal miners, the new law will provide forpayment of an amount equivalent to royalty paid to the state government toproject-affected persons.

The new MMDR Bill, 2011 seeks to replace a more thanhalf-a-century-old law under the same name.

As per the Bill, a Mineral Development Fund will be createdin every district, in which profit and royalty shared by miners will bedeposited and spent on the local population and area development, MinesSecretary S Vijay Kumar said.

Apart from compensating project-affected people throughprofit-sharing and royalty, the new Bill also obligates mining firms to pay a10 per cent cess to state governments and 2.5 per cent to the Centre on thetotal royalty paid.

The Mines Secretary added that the Bill also has punitiveprovisions to prevent illegal mining.