Mining: 'Profit-sharing is to help locals; not corporates'

The Union mines ministry on Wednesday said its profit sharing plans are not focussed on any corporate houses like Tatas and Jindals, but aims at providing compensation to the people displaced by mining projects.

"We are not interested in any individuals like Tatas and Jindals, in particular. Miners should adequately compensate the people displaced, that is what we want from the proposal of profit sharing (part of new mining bill)," Mines Minister B K Handique said.

The mines minister under whose regime the work on a new mining bill was initiated and which seeks to make it mandatory for firms to share 26 per cent profits with locals who lose land to mining projects, also opposed Steel Minister Virbhadra Singh's demand for concession to PSUs in the proposed law.

"We are not budging from our stand so far. There should be no concession for PSUs in profit sharing. There should be no reservation for PSUs in mineral- bearing areas," he said.

Handique said such concerns of the ministry, industry and other stakeholders should have been raised at proper platforms as eight rounds of consolations have already been held on the bill.

Further, he said, that the 26 per cent levy would be on the previous year's net profit of the mining projects and not on the assessment year.

"As of now it is decided that the 26 per cent profit sharing will be on last year's net profit, which will naturally become the part of assessment year's cost of operations.

"Let them come and tell us if they (stakeholders) are facing any practical difficulties, instead of saying it at any summit or seminar," Handique said.

Industrial houses, Tatas and Jindals have raised demand for imposing the proposed 26 per cent levy on operating costs and not on net profit, as no separate accounts are maintained for mining projects. State-owned SAIL has also opposed the modalities of such a payout.

According to him, a 10-member Group of Ministers, headed by Finance Minister Pranab Mukherjee, had arrived at a consensus on the new bill and its various proposals, about a fortnight back. The panel is likely to take up the Mines and Minerals Development and Regulations bill 2010 for final approval next month.

"Now, hopefully, the final meeting of the Group of Ministers on the the draft mining bill will meet in the first half of October," he said. The Ministry aims at early Cabinet approval to the bill so that it can be placed in the Winter Session of Parliament.