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Mining Bill, 2011 – Coal miners to share profits

The new Mines and Minerals (Development and Regulation) Bill, 2011 may become law soon. The Union Cabinet, on 30th September, 2011, approved its introduction in the Parliament. The bill will replace the present Mines and Minerals (Development and Regulation) Act, 1957. The new Bill will implement National Mineral Policy, 2008.

The new Bill requires lease holder for mining coal and lignite to pay 26% of profits annually to the District Mineral Foundation. The Bill calls this as ‘profit sharing percentage’ and it is payable after deduction of tax paid. As per official press release, the purpose is to share the benefits of mining with persons or families having occupation, usufruct or traditional rights in mining areas, and for local area infrastructure. In respect of other major minerals, the Bill seeks to payment of compensation equal to amount of royalty.

Once in statute book, the law will help in creation of better legal environment for attracting investment and technology into the mining sector. As per the proposed provisions, States may call for applications in notified areas of known mineralization for prospecting based on technical knowledge, value addition and end-use. States may grant direct mining concessions through bidding based on a prospecting report and feasibility study in notified areas where data of minerals is adequate for the purpose. Minimum floor price for competitive bidding can be set by State Government and provisions are proposed for allowing mining of small deposits in cluster, where cooperatives can apply.

National Mining Regulatory Authority for major minerals will be set up and State Governments may set up similar Authority at State level for minor minerals. National Mining Tribunal is also proposed to be established. Violators will be required to pay enhanced penalties while Special Courts at the State level will be established for speedier disposal of the cases of illegal mining.

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