New Delhi, Sep 30 (PTI): The Union Cabinet is all set to clear today a new bill aimed at regulating mining activities. The bill proposes a profit-sharing system and bidding of mining rights.

The bill will mandate coal companies to provide 26 per cent of post-tax profit for the welfare of affected people, a move intended to benefit mostly tribals.

The Mines & Minerals (Regulation and Development) Bill, 2011, which seeks to replace a 1957 act, also provides for setting up of National Mining Regulatory Authority and Tribunal and formation of District Mineral Foundations in 60 mineral-rich districts across the country.

The states will also be advised to set up authorities and tribunals on these lines.

The Bill, which advocates "sustainable and scientific" mining, also suggests non-coal miners like bauxite and iron ore firms to share an amount equal to that of royalty with local residents instead of just sharing profits.

A 10-member ministerial panel set up in June last year, has finalised the methodology ensuring that people in mineral-rich districts of Andhra Pradesh, Orissa, Chhattisgarh, Goa, Jharkhand, Karnataka, Madhya Pradesh, Maharashtra, Rajasthan, Uttar Pradesh and West Bengal get monetary benefits from mining.

If the bill is passed, an estimated amount of Rs. 10,000 crore will be generated per year from miners and an average amount of Rs. 180 to 200 crore will be distributed among District Mining Foundations of 60 mineral rich districts that include 25 districts affected by Left Wing Extremism.

Calling it "a revolutionary step", a government official said the UPA dispensation was committed towards the welfare of the villagers and families, particularly tribals affected by mining activities.