Mining cos may have to pay annual compensation to land losers

NEW DELHI: The government will make it mandatory for mining companies to pay annual compensation to land losers, through a mutual agreement between the firms and the persons holding traditional rights over the land. The revised legislation for mining — the Mines and Mineral (Development and Regulation) Bill — which incorporates the delibrations of a group of ministers who are overseeing the bill, has proposed a slew of concessions to those affected, directly or indirectly, by mining activities.

The compensation amount shall be determined before commencement of operations and paid in advance each year. The holder of mining lease shall also have to pay 26% of profit after tax, or a sum equivalent to the royalty paid during the previous year, whichever is higher.

According to people connected with the preparation of the draft bill, firms that have not commenced production or discontinued production in a particular year would have to pay an amount prescribed by the government to the District Mineral Foundation. Currently, mining operations of companies are only required to pay royalty to state governments.

After the termination of mining lease or licences, firms would also have to pay additional compensation mutually agreed upon to affected persons for damage done to the land due to mining. The proposals have been backed by the Congress party that has thrown its weight behind the drive to maximise benefits for project-affected families, especially in the mineral-rich, but backward areas of the country.