New mines bill to be sent for Cabinet nod
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Last Updated: Monday, July 11, 2011, 15:54
  
New Delhi: Mines Ministry on Monday said the proposed new mines bill, which provides for sharing of profits and royalty with the project-affected people, will be sent for Cabinet approval within a fortnight.

The Group of Minister headed by Finance Minister Pranab Mukherjee had last week approved the draft bill which provides 26 percent profit sharing by coal mining companies and 100 per cent royalty sharing by others with project-affected people.

"It will take about one or two days to prepare the minutes (of the meeting of Group of Ministers held last week) and then we will send it to the Cabinet for approval in next 15 days," Mines Minister Dinsha Patel told reporters here.

Speaking on the sidelines of annual general body meeting of mining industry body, FIMI, he added that the draft Mines and Mineral Development and Regulation (MMDR) Bill, 2011, will be tabled in the upcoming session of the Parliament.

Asked about the volte-face by the mines ministry over changing the proposal of 26 percent profit sharing clause to 100 percent royalty by non-coal mining companies with affected people, he said it was an unanimous decision taken after consulting almost all stakeholders.

"There were several representations on having 26 percent profit sharing clause. So after consulting different stakeholders, we felt that there is a need to change as it would have made accounting and other calculations difficult.”

"I told about this to Mr Pranab Mukerjee and other ministers besides Mr Montek Singh Ahluwalia. They all were unanimous with our new proposal," Patel said.

He, however, said there was unlikely to be any further changes in the draft bill, which also proposes to levy state and central cess on royalty paid by the miners.

"I don't think there will be any need to make changes further as this has been prepared after consulting almost all stakeholders," the Mines Minister said, adding that "the new draft has support of every body, including FIMI".

However, crying foul over the new provisions in the draft bill, the outgoing President of Federation of Indian Mineral Industries (FIMI), Siddharth Rungta said it would cost the mining industry between Rs 12,000 crore and Rs 15,000 crore.

"We had suggested an amount equivalent to 26 percent of royalty paid should be shared with the project affected people. The GoM increased it to 100 percent (for non-coal companies) which will impact the miners to the tune of Rs 12,000 crore to Rs 15,000 crore," Rungta said.

He added that the profitability of the mining companies will be under tremendous pressure due to the new provisions as the industry is already struggling to cope with the 20 percent tax on iron ore exports, levied in this year's budget.

Moreover, the various state taxes and railway freight have also gone up significantly, Rungta further said.

PTI


First Published: Monday, July 11, 2011, 15:54


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