Draft mining bill provides for higher compensation for project affected

The union cabinet has approved a draft new mining bill, which makes it mandatory to share benefits from mines with persons or families having occupation, usufruct or traditional rights in the areas being mined.

In case of minerals other than coal, mines should provide for an amount equal to the royalty for development of local area infrastructure. For coal, however, this is calculated at 26 per cent of net profits and the amount should be credited each year to district level mineral foundation.

The Mines and Minerals (Development and Regulation) Bill, 2011  (MMDR Bill, 2011), aims at better legislative environment for attracting investment and technology into the mining sector.

Under the proposed legislation, states will award mining leases in the notified areas of mineralisation on the basis of technical knowledge, value addition, end-use proposed ore-linkage etc. Licences will be awarded after proper evaluation of financial bids as well.

Alternatively, state governments 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.

State governments will also have to set a minimum floor price for competitive bidding.