india?s new mining bill shocks companies

http://www.commodityonline.com/news/India%E2%80%99s-new-mining-bill-shocks-companies-31886-3-1.html

NEW DELHI (Commodity Online): India?s draft mining bill which is cleared by the group of ministers last week has created a flutter among mining companies.

The bill has proposed that the miners should share 26 per cent of profits with locals. Experts said the proposed clause ? sharing profits with local people ? should be first defined properly with advance consultation with corporate houses and industry representatives. The word ?local? should be defined properly, that is, whether it means only the displaced people or the populace of adjoining area or the state?s entire population.

Efforts should be made to first revamp the laggard government machinery so that people can reap the benefits of compensation if they part with their land for mining or industrial projects. Theoretically, things sound good, but they turn murkier on ground.

Hindalco owns a majority ? over a dozen ? of bauxite mines in Lohardaga, Gumla and Latehar districts of the state. The company is in expansion mode and has proposed to come up with a smelter plant in Sonahatu area of Ranchi district.

Notably, a majority of private players have been allotted/earmarked mines for captive purposes, which means they are expected to use the mining products for consumption locally in respective industrial projects as promised in MoUs. There are a few players like Roongtas who sell iron ores in the market without any local value-addition.

Activists fighting for the displaced have been pressing for profit-sharing in mining/industry projects for a long time.

The draft mining bill, initially approved by the GoM, will need a second nod from the same body before it is sent to the Union cabinet. Thereafter, it will be placed in Parliament, probably during the winter session.

The draft bill will amend the existing Mines and Mineral Development and Regulation Act, 1957 and seeks to improve the conditions of tribals, who are affected the most by mining projects.