GoM nods new mines bill, coal miners to shell out 26pc profit

New Delhi, Jul 7 (PTI) A ministerial panel on mine
Thursday unanimously approved the draft Mines and Mineral
Development and Regulation (MMDR) Bill, 2011, which provides
for 26 per cent profit sharing by coal miners and 100 per cent
royalty sharing for others with project-affected people.
"The Bill has been unanimously passed. It will now go to
the Cabinet within the next 15 days. We will try to table the
Bill in the forthcoming monsoon season of Parliament," Mines
Minister Dinsha Patel told reporters emerging from the
one-and-a-half-hour long meeting of the Group of Ministers.
He, however, declined to give details of the provisions
in the Bill. "Once the proceedings are over, I will give you
details," Patel said.
Sources, meanwhile, said the Bill proposes 26 per cent
profit sharing by coal companies with the project affected
people; while rest of the miners would share 100 per cent
royalty.

The total burden on miners by shelling out profit and
royalty would be around Rs 11,000 crore, a minister, who
attended the meeting, said.
The Group of Ministers, headed by Finance Minister Pranab
Mukherjee, was constituted to iron out differences among
various ministries over 26 per cent profit-sharing formula
in the proposed new legislation. The provision created a lot
of furore among the industry with major players, including
mining body FIMI, opposing it.
Patel has recently written to Mukherjee expressing
concerns of the industry and urged him to look into the issue.
"...I feel that we can have an arrangement of industry
sharing an amount equal to 26 per cent of royalty paid in
previous year" instead of profit sharing formula, Patel had
written.
The profit calculation is difficult and accounts can be
fudged to hide the actual profit, the letter stated, adding
it shall be very difficult to calculate profit in captive
mines of big industry where final product is steel etc.
He also proposed retaining the present system of having
the Centre's prior approval for grant of mineral concessions
by states in case of ten major minerals, including iron ore
and bauxite, in the new mines legislation.
Besides Mukherjee and Patel, the 10-member GoM included
Law Minister V Moily, Planning Commission Deputy Chairman
Montek Singh Ahluwalia and Environment Minister Jairam Ramesh,
among others.