Mining companies end on mixed note as government approves new Bill

MUMBAI: Shares of mining companies on Friday ended on a mixed note, with Coal India ( CIL) plunging over 5 per cent after the government approved the new Mining Bill that calls for them to share profits and an amount equivalent to royalty with the project-affected people.

State-run miner CIL plunged 5.15 per cent to Rs 332.75 a piece on the BSE. The company, which contributes over 80 per cent of the country's total coal production, was the top loser among the Sensex blue-chips.

Metal companies like Tata Steel and Hindalco tanked 3.99 and 1.80 per cent, respectively, on the BSE, while state-owned steel maker Steel Authority of India fell 3.75 per cent.

Gujarat Mineral Development Corporation, too, fell 4.81 per cent and Sterlite Industries plunged 4.05 per cent.

In contrast, Sesa Goa, producer and exporter of iron ore, closed 4.37 per cent higher, while mineral producer NMDC closed with small gain of 0.22 per cent and JSW Steel settled 0.78 per cent up.

The BSE metal index closed 2.68 per cent lower at 10,995.57.

Analysts said mining shares lost sheen on concerns of the bill's impact on miners profitability as the Cabinet approved the mining bill.

The Bill is likely to be tabled in Parliament in the Winter Session.

Mines and Mineral Development and Regulation (MMDR) Bill, 2011, has provisions for 26 per cent profit-sharing by coal miners and an amount equivalent to royalty to be paid by other mineral mining firms with project-affected people.