State-run Coal India and NRI Anil Agarwal's Sesa Goa were worst-hit among mining companies on the BSE today, plunging 8.12 and 4.17%, respectively, as investors sold their stocks on fears that government nod to a mining draft will hurt their earnings.
Last evening, a ministerial panel--- headed by Finance Minister Pranab Mukherjee--- approved the proposed Mines and Mineral (Development and Regulation) Bill, 2011, according to which coal miners would have to share 26% of their profit and non-coal miners 100% royalty to the project affected people.
The mining draft is to be sent for the Cabinet approval soon. The development led to metal and mining companies being pummelled at bourses.
Coal India, which contributes over 80% of the country's total coal production, plunged 8.12% to Rs 362 a piece. Sesa Goa, the largest private iron ore miner in the country, dipped by 4.17% to Rs 281.85 per share.
State-owned steel maker Steel Authority of India, which sources 100% of its iron ore and 30% coking coal requirement indigenously, also faced the heat of the ministerial panel's decision. The company stocks fell 3.66% to Rs 136.75 per share.
Miners' body Federation of Indian Mineral Industries has estimated that the provisions under the proposed Bill would put an additional Rs 10,000 crore burden on non-coal miners.
Royalty, paid to the state governments, differs from one mineral to the other. It is charged at the mine-head on sales value. For iron ore, royalty is 10%.
India produces as many as 87 minerals, and total value of mineral production, excluding atomic minerals, in the country in 2010-11 was estimated at Rs 2 lakh crore.
Reacting to the mining bill draft approval, NMDC's stock fell 2.55% to Rs 258.15 per share.
Tata Steel declined 1.97% to Rs 594.45 a share. Sajjan Jindal-promoted JAWS Steel's scrip dipped 3.09% to Rs 882.25 per piece. Gujarat Mineral Development Corp's stock fell by 2.22% to Rs 158.85 apiece.
Meanwhile, the BSE benchmark index Sensex today closed down 1.15% at 18,858.04 points.
The government today said it has granted Maharatna status to Bharat Heavy Electricals Ltd and Gas Authority of India Ltd.