Federation of Indian Mineral Industries says minerals will become expensive and mining unattractive if the new formula is implemented.
The proposed benefit sharing regime for the mining sector, once implemented, would make minerals expensive and mining in the country unattractive, Federation of Indian Mineral Industries (Fimi) said.
A group of ministers (GoM) decided on Thursday that non-coal miners should pay an amount equivalent to 100 per cent of royalty for providing long-term economic security to the people whose land has been taken for mining.
“We completely agree with the government’s objectives, but 100 per cent royalty will not only make products costly, but also will make investing in mining unattractive,” said Siddharth Rungta, president Fimi. He said minister of state for mines, Dinsha J Patel, had earlier agreed to bring down the amount to 26 per cent of the royalty payment.
Expressing apprehensions on the proposed auction of mining blocks, where mining prospects have been cited but the extent, size and quality of ore is unknown, Rungta said it may turn out to be a ‘winners' curse’ as the auctions would be highly speculative and result in wastage of natural resources.
He also opposed the proposal to deal with the offences in the industry under a special court. “The industry should also be treated similar to the other industries,” he said. The proposals on benefit sharing and auctioning are part of the new mining legislation finalised by the GoM in a meeting.
Fimi will hold its annual general meet on July 11. In a press release issued prior to the AGM, the miners said draft Mines and Mineral Development and Regulation (MMDR) Bill, 2011, has not provided the mineral regime with an investor-friendly dispensation. The release said, “We believe that the Indian mining industry is over-regulated.”
The federation is also not comfortable with the export duty and railway freight charges on mineral ores. “Due to high rate of exports, several mines have reduced operations to just two shifts resulting in a partial shutdown of mines,” he said.
While responding to a query over the Posco issue, general secretary of Fimi R K Sharma said, “It is a dual policy if someone says the tribals should be brought into the mainstream and at the same time close the doors to come to the mainstream by not allowing such projects.”
LEASE PROTECTION
In a relief to small miners, MoS, mines, Dinsha Patel has agreed to protect the leases of mines whose area is less than 10 hectares (for major minerals) and five hectares (for minor minerals). Now, the terms of these mines will be extended till the exhaustion of mineral deposits in these areas.
