Draft mining bill gets GoM nod

In November, our cover story debated the draft Mines and Minerals (Development and Regulation) Act, 2010 that will provide 26 per cent of company profit to the locals. The Bill has been okayed by the Group of Ministers. A report.

In a recent move, the Group of Ministers (GoM) headed by Finance Minister Pranab Mukherjee have okayed the Mining Bill (MMDR 2010). The Bill will provide for sharing 26 per cent of company profits with local populace in mining projects. This was done at the fourth and final meeting that was concluded recently. According to BK Handique, Minister for Mines, all the concerns have been addressed and there are no major changes in the final version of the draft. The Bill is likely to be tabled in the ongoing winter session of the Parliament. As per sources the GoM has asked the ministry to strengthen the clause so that it provides competitive bidding for grant of mining leases. This is specifically done to address the concerns of the mineral rich states like Orissa and Jharkhand over proper compensational and traditional rights over minerals. There was insecurity amongst states regarding the new legislation. They feared that the new policy would adopt a first come first serve route as per Section 13 of the Bill instead of competitive bidding. According to Mining Secretary, Vijay Kumar, wherever there is mineralisation, the area will have to be notified and bid for. He further added that the concerns of the states over the compensation and traditional rights of minerals have been addressed in the new draft.

Prior to the submission of this draft mining bill which makes it mandatory for miners to share 26 per cent of profits with local people affected by their projects, the industry had opposed to the profit-sharing clause as they were of a view that it would hamper investment. The new draft bill proposes to create a fund to be created in order to pay the beneficiaries. It further adds that in case a mine is making losses or is not functional, the firm should compensate the people from whom the land has been acquired, the firm should pay an amount that equals royalty granted the state government. In addition to this, the GoM hav okayed to levy a cess on mining projects in order to provide basic facilities such as dispensaries and schools for the people who were affected due to the project. As per draft law, no mining project can be started in tribal areas without the consent of tribal communities that will be affected.

The panel was headed by Pranab Mukherjee and BK Handique, and included Home Minister P Chidambaram, Steel Minister Virbhadra Singh, Law Minister 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.

Additionally, there seems to be at least partly something that the coal mining industry and the policymakers will smile about: an honest attempt in early January to end the impasse on “no-go” zones. As logical and preliminary as it sounds, the coal ministry’s suggestion that the companies that have mining rights must spend up to five per cent of their net profit on afforestation should be something for the Ministry of Environment and Forests (MoEF) to chew over.

However, the basis of the argument remains unclear: deforestation from mining today will not be compensated for decades. It is a tough call for the ministry to make, and the PM’s expected intervention may help in the process of what just could be a radical decision. Making CSR mandatory has been on the cards, but recent indications are that it may not. The government seems to have taken the stand that CSR is a voluntary action.