Mixed reaction to mining bill

Once the news about passage of the new bill got around, the share market, too, started shift in trends.

Shares of Coal India Ltd fell over 5 per cent while that of Sesa Goa, producer and exporter of iron ore, closed 4.37 per cent higher, and mineral producer NMDC closed with small gain of 0.22 per cent and JSW Steel settled 0.78 per  cent.

“The new Mineral and Mines and Development Regulation bill is a welcome step in its intent to ensure decentralisation of powers; increase revenues by bringing in concepts of price discovery and true value; ensure equity, fair play and transparency; and promote scientific mining and sustainable development,” CII said.

FICCI Secretary General, Rajiv Kumar said, the proposal for profit sharing and mandatory royalty contribution would make mining unattractive for the industry. “The proposed contribution of 26 per cent of profit in case of coal and 100 per cent royalty in case of other minerals to the District Mineral Development Fund will make mining unattractive for organised investors including foreign investors. Indian mining is already one of the highly taxed sectors in the world and this new Act will further increase tax incidence on coal to 61 per cent and iron ore to 55 per cent,” he said.

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