Mining law draft has stringent norms

The new draft of the Mines and Minerals Development and Regulation Act 2010 (MMDR) has made provisions to strictly implement the compensation model for the people affected by the mining activity.

The defaulter will have to pay the penalty with 15% interest within 30 days of receiving the notice from the state government. Otherwise, the state government will have the power to cancel the defaulter’s lease, says the draft.

A group of ministers (GoM), headed by finance minister Pranab Mukherjee, on September 17 had approved sharing of 26% profits or the previous year’s royalty paid, whichever is higher, by the mining companies.

“The holder of the annual lease shall pay to the District Mineral Foundation an amount equal to 26% of the profit after deduction of tax paid of the previous year, or a sum equivalent to the royalty paid, whichever is more,” the draft states.

The draft of the mining bill, which has been reviewed by DNA, also says “where the holder of the lease is a mining company, it shall also allot at least one share at par for consideration other than cash to each person of the family affected by mining.”

It says the amount payable shall be in addition to any other amount or compensation payable to the person or family holding occupation or traditional rights of the surface of the land under any law for the time being in force.

The GoM is expected to clear the final draft in the coming days.
Explaining profit sharing, the draft mentions that the intention of the clause is to generate profits from mining-related operations of the lease holder, which should benefit the families affected by mining.
Industry lobbies including Federation of Indian Chambers of Commerce and Industry (Ficci) had opposed the equity sharing model proposed in the GoM meeting. 

Federation of Indian Minerals Industries (Fimi) has been protesting the concept of 26% profit sharing.