Mining firms told to give 26% of profit away, but govt co parts with just 0.5%

RAIPUR: As the Centre proposes to make it mandatory for mining companies to share 26% of profits with local communities, its own largest coal producing company spent just 0.5% of its profits on corporate social responsibility (CSR) projects in 2009, according to data with Chhattisgarh government.



The company, South Eastern Coalfields Limited (SECL), is a subsidiary of Coal India, a PSU under the Ministry of Coal. Nearly three quarters of Coal India\'s output is mined by SECL from coalfields in the tribal districts of Koriya, Korba, Sarguja and Raigarh in North Chhattisgarh.



Figures with the state government\'s mining department show that SECL produced 950.59 lakh tonnes of coal in the state last year, making a profit of Rs 2117.21 crore. But India\'s largest coal producing company spent just Rs 7.43 crore — a minuscule 0.5% of its profits — on CSR. In the absence of any other profit-sharing mechanism, spending under CSR is the closest indicator of what mining business gives back to people in the area where it operates.



SECL\'s low CSR spending is bound to be embarrassing for the government at a time when it is trying hard to make mining appear less rapacious and more humane by introducing a profit sharing clause in the new mining bill. More so, since SECL is a \'Mini Ratna\', and its parent company Coal India is a Navratna — a privileged status to India\'s best performing PSUs.



The expenditure on social welfare by another Navratna, and India\'s largest iron ore producing company, National Mineral Development Corporation, is not significantly higher. In 2009-2010, NMDC made a profit of Rs 3448 crore, but spent just Rs 85 crore or 2.46% of the profits on CSR, according to figures provided by Chhattisgarh government.



The figures could not be independently confirmed with spokespersons of SECL or NMDC, despite repeated attempts. NMDC has been mining iron ore in the Bailadila hills of Dantewada since the 1960s. The district has turned into a base for Maoists rebels, who have launched a series of deadly attacks. v
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