NEW DELHI, 2 OCT: Maharatna Coal India today said its profitability would be eroded by about Rs 2,000 crore per annum post-enactment of new mines legislation, which mandates coal miners to share 26 per cent of their profits with project-affected people. “It (new mines bill) would hit the profitability of the company by about Rs 2,000 crore,” Coal India chairman Mr NC Jha said. Mr Jha, however, added that if the government wanted to maintain the profit of the state-run PSU, it would have to resort to hike in coal prices. “If the profit of the company has to be maintained, it has to be done by increasing the prices of coal. Therefore, it is for the government, which is the major shareholder of the company, to decide whether to go for price hike or not,” Mr Jha said. Mr Jha, earlier this month, had said that the additional cost impact due to the new Act would eventually be passed on to the consumers. The Federation of Indian Mineral Industries (Fimi), too, had said yesterday that prices of all minerals would go up due to the new mines Bill. The domestic coal prices range between Rs 770 and Rs 1,700 a ton at present. The government on Friday approved the landmark Mines and Minerals Development and Regulation (MMDR) Bill, which provides for miners to share 26 per cent of their net profits for the people affected by the coal projects, while the burden on the non-coal miners will be amount equivalent to royalty. Mr Jha exuded confidence that despite a dip in the company's profit post-enactment of the new law, the state-owned firm would stand benefited in the long-term by getting land without hindrances and would improve its bottom line. “In the short term, Coal India would of course witness a dip in its profit, but in the long term it would be beneficial, as with more land with the public sector firm the business volume would increase and the profit would automatically increase,” Mr Jha said. The state-owned miner, which accounts for about 80 per cent of the country's total production of coal, had reported a consolidated net profit of Rs 10,867 crore in financial year 2010-11. Investment plan Coal India today said it might invest up to Rs 40,000 crore in the 12th Plan period ending 2017 towards development of mines for augmenting production. “We will spend anything between Rs 35,000 crore and Rs 40,000 crore in the 12th Plan period for development of new projects, buying machinery and building washeries, among others,” CIL chairman Mr NC Jha said. He said against the company's investment target of Rs 35,000 crore during the 11th Plan period, CIL might end the five-year period with an actual investment of less than Rs 25,000 crore. “There were a lot of bottlenecks, because of which we could not move ahead with our entire investment proposals in the 11th Plan period,” he said, adding during the 12th Plan, the production target was more which required more investment.