Draft bill seeks 26 per cent of miners' profits for locals

A group of ministers headed by finance minister Pranab Mukherjee has approved the draft mining bill, which envisages sharing 26 per cent of a company profits in mining projects with the local populace. The GoM had finalised the draft on Friday.

''So far as the GoM is concerned, it was the last meeting. All the concerns have been addressed and there are no major changes in the final version of the draft,'' mines minister BK Handique said after the fourth meeting of the GoM that concluded late in the evening. The bill is likely to be tabled in the ongoing winter session of Parliament.

The mining firms will have the option of paying a royalty to the affected persons - but this would have to be more than the 26 per cent net profit figure.

The move was prompted by the public outcry and fierce opposition from tribals to mining projects, which are inherently destructive of the environment. Mining by big companies in tribal areas is widely considered one of the key factors in the rise of Maoist (Naxalite) violence in the heart of the country.

Apart from Mukherjee and Handique, the 10-member GoM had home minister P Chidambaram, steel minister Virbhadra Singh, law minister M Veerappa Moily, commerce minister Anand Sharma, tribal affairs minister Kantilal Bhuria, Planning Commission deputy chairman Montek Singh Ahluwalia, coal minister Sriprakash Jaiswal and environment minister Jairam Ramesh.

In order to address the concerns of resource-rich states like Jharkhand and Orissa over adequate compensation and traditional rights over minerals, the GoM has asked the ministry to strengthen the clause that provides for competitive bidding for grant of mining leases. States had feared that the new legislation would provide for adopting a first-come-first-served basis for granting prospecting licences over large areas.