A new Indian draft mining bill is causing concern among mining groups and their investors in one of the world’s leading coal and iron ore producing countries. Accoring to India’s Economic Times, shares in Coal India have fallen after news of the possibility of a new Mining and Mineral Development Regulation Bill emerged. Confidence in other groups, such as iron ore producer, NMDC, has also been hit. The issue is that the draft bill states that coal miners should pay 26% of their profits to any local people displaced by the projects. Companies involved in the mining of non-coal minerals would also have to shell out an amount equal to the royalty they pay to the government.

Overall, shares in Coal India (CIL) have tumbled over 12% since June 2011 followed by JSW Steel (11%), SAIL (5.3 %), NMDC (3.8 %) and Sesa Goa (2.5 %); though the proportion of publicly-held shares in Coal India still only stands at 10%, with the remaining 90% retained by the government. The Indian government plans to introduce the new mining bill in the coming monsoon session of Parliament, after cabinet approval. The bill is a bid by the Congress-led government to ease opposition to land acquisition for mining projects from locals in mineral-rich tribal districts that are beset by chronic poverty, which the government believes often fuels support for Maoist rebels.