Tatas for mining profit share as part of costs

Tata Steel has suggested that the social cost envisaged in the draft mining Bill, which asks miners to share 26 per cent of profits with local people affected by their projects, be made part of operations cost, instead of profits.

“Tata Steel has always believed in sharing its prosperity with the people in its neighbouring communities for the last 100 years. The proposal to include them in the earnings of the corporate entities operating mines is laudable but the company also believes that this social cost must be a part of the cost of operations and not derived as a share of profit. Profit can be impacted by several factors. Whereas when it is treated as part of the operating costs, it will be consistent, transparent and sustainable through the life of the mine,” Tata Steel raw materials vice-president Partha Sengupta said in statement.

The company feels that the quantum should be decided along similar lines of royalty. “It is imperative that the utilisation of the funds be done in consultation with the community. The implementation should be done through a special development vehicle such as a Trust/Local Area Development fund administered by a local governance body consisting of the community, the government and the corporate operating in the area,” said Sengupta.

Tata Steel’s views come in the wake of the ongoing discussions on the draft proposals of the MMDR Act vis-à-vis the inclusion of the development of local communities through the allotment of 26 per cent of the profit after tax on account of the annual compensation to the affected people.

On Saturday, Steel Authority of India Ltd (SAIL) had raised doubts about the implementation of the proposal. “We cannot be okay with this proposal. There are practical issues that need to be resolved,” SAIL Chairman C S Verma had said.