States to ensure profit sharing in mining projects: Jaiswal

Widening the outgo for development of the locals who lose land to mining projects, the government today said companies would have to share either 26 per cent of profit from mining or sum equivalent to royalty -- which ever is higher-- and the same is envisaged in the draft mining law.

"It will be the joint responsibility of the respective state governments and the District Collectors to ensure payment of 26 per cent of profit or additional royalty, which ever is higher, to those displaced on account of mining projects," Coal Minister Sriprakash Jaiswal told reporters here.

The new mining bill, which seeks to mandate companies to share profit, is being considered by a 10-member Group of Ministers headed by Finance Minister Pranab Mukherjee. The GoM is expected to meet soon for the last time on the bill.

"At a recent meeting of GoM it was decided that 26 per cent of the profit gained from mining activities in an area will go to those whose land has been taken away for the purpose.

"We intend to introduce a bill in this regard in the forthcoming session of the Parliament and bring all mining companies - government, private and even foreign, those who have been in the trade for long as well as new entrants,  - under the ambit," Jaiswal said.

He further said, if the companies are making losses from the mining operations, they  would be asked to channelise a sum equivalent to royalty towards local area development.

"Our economy is in a stage where we must make the optimum use of our mineral resources. At the same time, the government is aware of its responsibility towards the weaker sections of the society and will not allow poor people living in backward areas to be left behind in the country's march towards prosperity," he added.