Friday, July 08,
A group of ministers formed to approve the draft mining Bill, has agreed to earmark 100% of the royalty paid by major mineral mining companies to compensate people displaced by such projects. The panel also agreed to earmark 26% of the profit made by coal mining companies.
The concept of 100% royalty sharing attained mixed reactions from the market.
Industry body like FIMI (Federation of Indian Minerals Industry) has welcomed the concept of royalty sharing with the displaced people by the mining industry.
However, the GoM has retained the provision of 26% profit sharing for the coal sector which is believed to make electricity costlier for the common consumer and other industrial end-users.
Since the GoM has unanimously agreed on the Bill, it would get Cabinet’s nod within two weeks and likely to be introduced in coming Monsoon session of Parliament, said Mines Minister Dinsha Patel.
According to Industry experts, “The current royalty on iron ore is 10% and the royalty collected goes to the state government. After the imposition of the bill, the total burden on miners on account of profit and royalty has been estimated at around Rs 11,000 crore per annum and the proposals of the Bill (profit and royalty sharing) would act as a disincentive for the mining sector and would also deter foreign investment in the sector”
According to mine owners, “It is too early to comment on the issue as it is a draft bill and the modus operandi will take time. There would not be any immediate impact on the prices of iron ore & coal”
Reported by: Monica Patnaik (monica.patnaik@steelmint.com)
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