Orissa's minerals will now cost more for industries wanting to mine them. Growing discontent in mineral-rich regions due to loss of livelihoods caused by mining operations recently pushed the Orissa government to notify the Orissa Rural Infrastructure and Socio-Economic Development Bill, 2004. A cess of five to 20 per cent of the annual value of mineral bearing lands (one half of the value of minerals produced from such lands in two years immediately preceding a given financial year) was imposed on different minerals through a notification issued on May 31, 2005. In view of their rising international demand, the cess on bauxite, coal, iron ore, chromite and manganese has been fixed between 15 to 20 per cent. Around 5 to 10 per cent cess has been levied on dolomite, limestone, china clay, philite, gemstone, decorative stone and other minerals.

"Through the new tax, we are trying to provide a better life to people who bear loss due to mining activities,' said Padmanabha Behera, Orissa's minister of steel and mines. But crucially, by capping the tax at 20 per cent, the Navin Patnaik-government has taken care not to dissuade investors too much. Along with the new tax, the state government also intends to institute a special fund to ensure the development of infrastructure, education, employment and socio-economic programmes in the rural mining areas.