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LATEST NEWS UPDATES | Industry jitters over profit clause in draft mining bill by Amit Gupta

Industry jitters over profit clause in draft mining bill by Amit Gupta

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published Published on Sep 20, 2010   modified Modified on Sep 20, 2010


Existing and prospective industry and mining players of Jharkhand are apprehensive about the draft mining bill, which seeks to make them share 26 per cent of profits with locals. A group of ministers (GoM) approved the draft bill on September 17.

Speaking to The Telegraph, Jindal Steel & Power Limited’s (JSPL) senior deputy general manager (corporate affairs) V.P. Sharan said: “The proposed clause — sharing profits with local people — sounds good as we have been involved in several activities related to corporate social responsibility (CSR). Besides, we have provided jobs to land losers under the rehabilitation and resettlement (R&R) policy.

“But many things 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,” he added.

JSPL, owned by Kurukshetra Congress MP Naveen Jindal, has been earmarked an iron ore mine in West Singhbhum and two coal blocks in Santhal Pargana.

Former chief executive officer of JSW Steels Jharkhand Limited R.P. Singh was more vocal in his criticism of the bill in the wake of weak implementation of R&R policy.

“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,” said Singh, who has served in a senior managerial position in state-owned Steel Authority of India Limited, which is not in favour of 26 per cent profit-sharing with locals.

Aditya Birla Group company Hindalco Industries Limited’s senior vice-president (corporate affairs) R.P. Sharma said he was yet to go through the details of the draft bill. “I need to first find out the details of the profit-sharing proposal before commenting on this vital issue,” he added.

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. However, activist Dayamani Barla expressed doubts over the machinery that would dole out the benefits to real land losers and local people.

“In my opinion, the profit-sharing percentage should go up to 50 per cent and the government should ensure that people, who are really affected by such projects, are benefited,” said Barla, who had spearheaded the protest against steel behemoth ArcelorMittal in Khunti-Torpa region.

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.


The Telegraph, 20 September, 2010, http://www.telegraphindia.com/1100920/jsp/frontpage/story_12957700.jsp


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