A new Mines Bill that provides for sharing of profits and royalty with project-affected people has been cleared by Cabinet, Indian Mines Minister Dinsha Patel said Friday.

The Bill is likely to be tabled in the Indian Parliament in the Winter Session.

"The Union Cabinet today approved the Mines and Mineral Development and Regulation (MMDR) Bill, 2011, which has provisions for 26 per cent profit-sharing by coal miners and an amount equivalent to royalty by others with project- affected people," Patel said.

The Bill was earlier supposed to be tabled during the Monsoon Session, as a ministerial panel headed by Finance Minister Pranab Mukherjee had approved it in July.

As per the provisions of the Bill, coal mining companies will have to share 26 per cent of the profits from their mines with people impacted by projects.

In the case of non-coal miners, the new law will provide for payment of an amount equivalent to royalty paid to the state government to project-affected persons.

The new MMDR Bill, 2011 seeks to replace a more than half-a-century-old law under the same name.

As per the Bill, a Mineral Development Fund will be created in every district, in which profit and royalty shared by miners will be deposited and spent on the local population and area development, Mines Secretary S Vijay Kumar said.

Apart from compensating project-affected people through profit-sharing and royalty, the new Bill also obligates mining firms to pay a 10 per cent cess to state governments and 2.5 per cent to the Centre on the total royalty paid.

The Mines Secretary added that the Bill also has punitive provisions to prevent illegal mining.