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Rediff.com  » Business » Mining firms may have to share fortunes with locals

Mining firms may have to share fortunes with locals

December 12, 2011 19:44 IST

A Mines and Minerals (Development and Regulation) Bill tabled in the Lok Sabha on Monday seeks to compel mining companies to pay higher compensation to the people displaced by their projects and share a part of their fortunes with them.

The mining companies in the coal sector will have to share 26 per cent of profits from their projects with the displaced while those in other mining businesses will have to pay an amount equal to the royalty to the government to create a fund for the welfare of the displaced people.

Mining Minister Dinsha Patel, who piloted the Bill in the House, says the attempt is to let the mining projects not get scuttled by the locals as has been happening these days with violent protests by the displaced persons for inadequate compensation and loss of livelihood. Projects of companies like Korean steelmaker POSCO and Germany's ArcelonMittal have been blocked because of the land acquisition woes.

The industry has been up in arms against the Bill on the ground that it doubles the royalty, warning that few would venture to invest in the mining sector if the government drives up the costs to make any new projects uneconomical.

The government, however, ignored their protests since it cannot afford to become anti-people if it does not listen to the demand of the people, mostly tribals, who are hit by the mining projects.

The Bill is basically for tribals and others living in forests who do not know how to earn the livelihood if they are ousted to allow the mines, the minister said.

A correspondent in New Delhi