New Delhi: The Mines Ministry is planning to
make it mandatory for companies to compensate people for their
land with the amount of royalty they pay to states, even if
the mines are non-functional or running losses.
As per the proposed legislation, miners will have to
share 26 per cent profits of their projects with those whose
land is acquired.
However, to further safeguard the interest of the
displaced, the government is now trying to ensure that they
get returns in case mines make losses or are not operational.
"The Mines Ministry has proposed that the displaced be
compensated, with amount equivalent to the annual royalty paid
by the miners to state governments, even if the projects are
non-operational or making losses," a senior government
official told PTI.
"This will be in addition to the proposed clause that
makes it mandatory for firms to share profits and give
symbolic free equity (one share)to affected persons," he said.
The royalty paid by mining companies to state governments
like Orissa, Jharkhand and Karnataka runs into crores of
rupees. Royalty on most of the minerals like iron ore is
collected on the basis of its market price.
Many companies take years to develop and start production
from the mines from the date of allocation of blocks.
Last week, a Group of Minister (GoM) headed by Finance
Minister Pranab Mukherjee had asked the government to rework
the draft mining legislation and give it "more teeth".
It had asked the Mines Ministry to make it mandatory for
mining ventures to share 26 per cent of their profit from
mines with locals, under the new mining Act being framed.
"The proposal to compensate the displaced has already
been vetted by Ministry of Corporate Affairs, which suggested
profit sharing instead of the earlier proposed 26 per cent
equity in the ventures," the official said.
The equity sharing provision was opposed fiercely by the
industry, especially lobby group FICCI.
The Mines Ministry is expected to send the revised
draft of the bill to the GoM this week. "The GoM may meet once
again next week, before the Bill is sent to Cabinet for its
approval", said the official.
Mines Secretary Subramanyam Vijay Kumar had yesterday
said, "It would be our priority to introduce the Bill in the
current session of Parliament."
The new Bill seeks to expedite grant of mineral
concessions in an expeditious and transparent manner, besides
attracting investments in the sector.
Investment worth lakhs of crores of rupees has been
delayed because of land owners` resistance to part with