JOIN USPatnaik's reaction came shortly after the union cabinet approved the new Mines and Mineral Development and Regulation (MMDR) Bill, 2011. Stating that the new bill has provision for 26 per cent profit sharing on coal and an additional 10 per cent on iron ore, Patnaik said "we had asked much more than what has been announced today."
Earlier this month Patnaik in a letter to the prime minister had demanded 50 per cent share on the the super normal profit made by the private mines owners and imposition of a mineral resource tax on iron ore. Stating that insatiable demand for iron ore in export market has made it highly profitable with returns from mining being far in excess of economically acceptable rates, Patnaik had said the super normal profits being made was unheard in any other industry.
This has led to a situation where inspite of the state being the owners of the resources, the mine owners were benefiting beyond any measure of reasonable returns, he said.
"I am concerned about the huge profits accruing to merchant mining companies, a large number of which are in private hands. In fact the large profits being made by private mining companies, disproportionate to any efforts made, has led to demand from various groups to nationalise mineral resources," the chief minister's letter had said.
The state was the owner of iron ore resources which were non-renewable and could be extracted only once, he said adding that it was therefore important that the super normal profits from natural resources did not go to a few hands and that the community could get fair return.
The surplus rent should accrue to the state which could be utilised for improving social and physical infrastructure, strengthen welfare measures besides improving livelihood of the people, Patnaik had said. "The Australian Government has announced that Mineral Resource Rent Tax of 30 per cent on iron ore which will be applicable from July 1, 2012. On the same line, a Mineral Resource Rent Tax should be levied on iron ore, to be charged at 50 per cent of the surplus rent and should accrue to the states. As and when surplus rent decreases the tax too will automatically decrease," he had suggested.