Typepad has this amazing feature called Blog It which is an app that allows you to highlight text on a page and then send it through to your blog. It also allows you to post the same content to Facebook and Twitter. My blogging has gone up as a result of this. But sometimes you just need to type a blog.
The Business Standard / New Delhi published an analysis of their own mining industry. It was written by R K Sharma - Secretary General, Federation of Indian Mineral Industries and entitled "Should locals get 26% of mining profits?". The analysis talks about India's own issue with redistribution which is aimed at
displaced people in addition to providing employment and other assistance in accordance with the rehabilitation and resettlement (R&R) policy of the state government
The proposition is that 26% of the profits of each mine should be redistributed to these beneficiaries.
However there is a strong move away from this thought because they have learned from our own DMR
If 26 per cent of the net profit is allocated for local development, a firm may not have enough of a cushion to invest in future exploration, which is required to enhance its mining operations. It is worth noting that ever since the 26 per cent scheme for Black Economic Empowerment (BEE) was enforced in South Africa and Namibia — which the present recommendation has copied — no significant investment has come into the mining sector in these nations; instead, there has been a flight of private capital.
Sharma, speaking on behalf of the Federation of Indian Mineral Industries (FIMI), suggests royalty-linked contribution as the best way to achieve the government’s objectives of providing long-term economic security, raising living standards and providing better hygiene, health and education to the families of those whose land has been taken over for mining.
Kind of inspired by the new charter but with a stronger and perhaps more enforceable focus on community development. The single flaw in this argument is that the state needs to manage this royalty in the form of a trust. We as South Africans would steer clear from this - especially if the DMR in its current guise is involved.
But the sentiment remains that
If 26% of the net profit is allocated for local development, a firm may not have enough of a cushion to invest in future exploration, required to enhance its mining operations
Peter Leon would not disagree with this. Read the article it is very balanced.
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