GoM consensus on draft mining Bill

The Group of Ministers (GoM) headed by Finance Minister Pranab Mukherjee today largely approved the draft mining Bill, which seeks to make mining companies share 26 per cent of their profits with local people who get affected by their projects.

“All that we had suggested has been, by and large, approved. There will be a final sitting of the GoM. After that, the Bill will go to the Cabinet,” Union minister for mining B K Handique said after the meeting. He added that the Bill was likely to be tabled in the winter session of Parliament.

Handique had earlier clarified that the proposal of 26 per cent profit sharing by miners was unlikely to be diluted, as there was a large consensus among the GoM members on the issue. After it is introduced in Parliament, the Bill is likely to go to a standing committee for further deliberations.

The original draft had proposed granting ownership to locals in mining projects. Resistance from locals and the prevalence of Naxalism in the mining belt are the primary reasons for the proposal. Companies like Posco, Vedanta and ArcelorMittal have been facing protests against land acquisition in Jharkhand, Chhattisgarh and Orissa.

The 10-member GoM was constituted in June to discuss the provisions in the Mines and Minerals (Development and Regulations) Bill. It has met thrice to give a final shape to the controversial Bill before it goes to the Cabinet.

Private sector mining companies are already opposing the 26 per cent profit-sharing provision. In a recent letter to the finance minister, Federation of Indian Chambers of Commerce and Industry Secretary General Amit Mitra cautioned against mining projects becoming unviable in case the proposal was implemented, as it would put “very heavy financial burden on mining companies”. Ficci argues that if profits of mining companies can be shared with tribals, then even losses should be shared. The chamber has also said the proposal would lead to tribals misusing compensation money.

Meanwhile, GoM is likely to meet for the last time soon to give the draft a final touch. “We will come up with the consolidated Bill now, as consensus has been obtained. The Bill will come to GoM at least once more for final approval,” said mining secretary Vijay Kumar. He said no date had been finalised for the next meeting of GoM.

Apart from profit sharing, the new mining legislation also has provisions for setting up a central regulator to check the rampant illegal mining across the country. The Bill also proposes allowing states to set up special courts for prosecution of mining-related offences.

The other members of GoM include home minister P Chidambaram, steel minister Virbhadra Singh, law minister Veerappa Moily, mines minister B K Handique, commerce minister Anand Sharma and environment and forests minister Jairam Ramesh.