New Delhi, September 17
A new legislation on mining will ask companies to share up to 26 per cent of their profits with the local people whose land are acquired or whose lives are affected by mining projects. Mining has raised a political storm with tribals being evicted in the name of development.

A ministerial panel, headed by Finance Minister Pranab Mukherjee, today reached a consensus to give the go-ahead to the draft mining Bill. “It is largely approved. One more sitting of GoM (Group of Ministers) remains after which it will go to the Cabinet. Whatever we have suggested has by and large been approved. We will work on it,” Mines Minister B. K. Handique told the media after the meet.

The ministry plans to introduce the Bill in the winter session of Parliament to replace the existing Mines and Mineral Development and Regulation Act (MMDR Act), 1957.

Senior officials present at the meeting said the Mines Ministry would work on the final draft and place it before the GoM soon. The new Bill had proposed that a fund - the District Mineral Foundation - would be created and the beneficiaries be paid out from it. The government was keen to have regulator for the mining industry almost on the line of regulators for the telecom industry.

At present, the government pays a one-time compensation to farmers whose lands are acquired. This is not only inadequate, but also leads to the loss of livelihood as the framers usually do not have the skills to work in the specialised industry while the measly compensation amount usually gets spent.

The government proposes that in case of a mine being non-functional or in losses, the firms should compensate the people affected by land acquisition, by paying them amount equal to the royalty given to state governments. Royalty paid by mining companies to state governments runs into hundreds of crores of rupees. The new Bill seeks to expedite the grant of mineral concessions in a transparent manner and attracting big investments in the sector.