This concession will be called reconnaissance permit. Appropriate measures to codify the concept in the Act and the Rules thereunder are being envisaged.

A comprehensive legislation is also on the anvil for development and regulation of mineral resources in the offshore areas. In this case, there will be three types of operating rights, namely, non-exclusive reconnaissance permit, exclusive exploration licence and production lease. The offshore areas would be released periodically for grant of operating rights for systematic development of mineral resources. As reconnaissance permit would be a non-exclusive permit, no question determining priority will arise and any number of persons could be granted this permit over the same area or even forthe same mineral.

No exploration licence or production lease would be granted to any person over an area unless he submits a plan for exploration operation or development of mineral deposits. The operating rights will be granted only to Indian nationals or a company defined in Section 3(1) of the Companies Act.

Reconnaissance permit will be granted for a maximum period of two years with the provision for renewal for another two years. Exploration licence will be granted for three years and for subsequent renewal up to five years. Production lease will be granted for 30 years with the provision for renewal for 20 years. Renewals for exploration licence and production permit will not be automatic but will be considered by the administering authority.

The grant of operating rights will relate to standard size of dimension of five minutes of longitude and five minutes of latitude which would cover an average area of 83 sq km. The grant would cover more than one block so long as they are contiguous. Themaximum area under reconnaissance permit, exploration licence and production lease would cover blocks of two degree latitude by two degree longitute, 30 minutes latitude by 30 minutes longitude and 15 minutes latitude by 15 minutes longitude respectively.

The department of mines would be the nodal agency for processing of applications seeking permission for grant of airborne geophysical surveys, providing an interface between licence holders and concerned agencies.

Part C of Schedule 1 to the MMRD Act will also be amended to confer greater control in grant of mineral concessions to state govenments. The proposed amendments will also liberalise area restrictions relating to different categories of mineral concessions and effect delegation of more powers to state governments in regard to grant of mineral concessions for areas which are not compact and contiguous. State governments will also be delegated with more powers in granting of second and subsequent renewals of mining lease and for approval of miningplans in respect of certain non-metallic and industrial minerals for ensuring procedural simplifications.

The proposed amendments will also provide more stringent provisions in the Act for curbing illegal mining including powers of confiscation over and above the existing powers of seizure in respect of tools, equipments used and bringing transport and movement of minerals under the statutory ambit.

The Federation of Indian Mineral Industries (FIMI) has already alleged while state governments are being delegated with more powers, some of them are seeking to impose extraneous conditions when being approached for grant of PL or ML. Some state governments are adopting a system where an applicant cannot directly obtain the grant of lease. All the leases are first granted to the state mining corporation which then transfers it to the applicant entrepreneur in return for some consideration which may be as high as Rs 20 crore in lumpsum or an amount equivalent to royalty for each of mineral removed from themine. This practice is based on proviso 4, sub-rule 2, Rule 37 of the Mineral Concession Rules, 1960.

FIMI in this context has suggested repeal of this provision as against the backdrop of liberalisation process, the reserving of areas by state governments for their public sector undertakings for transfer to prospective private entrepreneurs is a retrograde step. Also when a level playing field for public and private sectors is seen as a basic prerequisite for attracting investment, the practice of allowing only public sector organisation to charge a premium while transferring a lease is anomalous.

FIMI has also suggested that both the Union and state governments should consider setting up of a Mining Areas Infrastructural Development Board which can be funded by setting aside 20 per cent of the royalties realised by the state governments. This Board will aid in development of infrastructure facilities in the backward areas where the mines are located.

The Indian Bureau of Mines (IBM) has suggested thatmineral processing units should be considered as an extension of mining activity and brought under the purview of MM(R&D) Act. There is also a need for technical auditing of these plants as per the stipulated conditions in the approved project document.