New Delhi: Allaying miners’ apprehensions, Coal India on Sunday said the 26% profit sharing clause in the proposed Mines and Minerals (Development and Regulation) Act will help mining firms ensure more production.
“The proposal had some impact on the stocks. But, people have now realized that with this, land availability will go up and with that, production,” Coal India chairman N. C. Jha said.
Coal India, the country’s largest coal miner, is expected to receive the hardest blow among miners when the Bill will become an Act.
The ministerial panel, led by finance minister Pranab Mukherjee, has also approved 100% sharing of royalty by non-coal miners with people affected by their projects.
Jha said that the rise in volume would help mining firms to ensure a hike in margin and hoped the same would continue at the current level in the days to come even after additional outgo as proposed in the Bill, which is likely to tabled in the ensuing monsoon season of Parliament.
The mining pack on the Bombay Stock Exchange witnessed a sharp fall following the Group of Minister’s announcement of the proposal on 7 July. At close on Friday, Coal India shares were 1.5% lower at Rs387.95. Sesa Goa stock fell by 6.49%.
Mining firms, however, are yet to digest the proposal. Various attempts are being made by industry bodies to dissuade the government from tabling the bill in its current form.
Miners body Federation of Indian Mineral Industries said non-coal miners’ bottomline may shrink by around Rs10,000 crore as a fallout of the 100% royalty sharing provision made in the proposed Bill.
A member of Ficci’s mining committee, Anand Goel, said the impact of 26% profit sharing for coal and 100% royalty sharing with the project affected people for non-coal miners would amount to Rs15,000 crore annual payment for the mining firms.