The MMRD Amendment Bill will attempt to end the centre's supremacy over mineral reserves by handing over key decisions to state governments. It will allow states to approve mining lease renewals and prospecting licences for major minerals like gold, iron ore and bauxite. The bill will also permit states to approve plans for small mines and transfer mining leases. A cabinet note on the draft bill is now in circulation among other ministries.

Once the inter-ministerial consultation is over, the draft bill will be placed before the cabinet for its approval. Sources in government say the bill is likely to be listed in the winter session of parliament. The thrust of the draft is to delegate more powers to the state governments, simplify procedures for securing government approvals and curb illegal mining. Ifapproved by parliament, the amendment act will be the most significant change in the country's mineral policy since the liberalisation of mining practices in 1993.

The MMRD Act first came into being 1948, and was replaced by a new act by in 1957. It was rigorously amended in 1994. The thrust of the amendment then was to usher in private sector investment. The crux of the draft, evolved from the Tandon Committee recommendations, is to decentralise the route of approvals for mining, by delegating greater powers to the state governments. The elimination of a two-tier system of acquiring clean chits for mining will automatically reduce procedural delays and simplify norms.

The Tandon panel, which submitted its report in January this year, also studied means of making rules against illegal mining more stringent. The panel recommended for instance, that Section 20 of the MMRD Act be amended to make transportation of illegally mined minerals an offence.

The mining laws now only allow confiscation of illegallypossessed mining tools. The amendment will allow state governments to seize vehicles transporting minerals, mined without a permit.

The proposed draft bill will also provide model rules for checking illegal mining. The amendments, if passed by the two Houses of Parliament, will be followed by concomitant changes in the Mineral Concession Rules and the Mineral Conservation and Development Rules, 1988.

The BB Tandon Committee, named after the secretary, mines, who chaired the panel, was set up by the United Front government in February last year, to study ways of ensuring a greater say for the states in approving mining leases and prospecting licences. States now have a complete say over the distribution and renewal of leases for minor minerals like granite, but the Centre reserves the right to approve mining leases and prospecting licences for major minerals, like gold, diamond, copper, bauxite, coal and iron ore.

The United Front government made somewhat of an attempt to decentralise powers by issuing acircular, that allowed states to approve the first renewal of a mining lease. The MMRD Act allows state governments to recommend lease renewals, but the ultimate authority to grant the lease remains with the Centre.

The circular allowed states the right to the first renewal of mining leases, that become due after 30 years. The Tandon Committee has now recommended that states be allowed to approve all renewals of leases and prospecting licences.

It has also suggested that states be allow to transfer leases and approve mining plans for small reserves. Mining plans are now approved by the Indian Bureau of Mines.

The Tandon Committe said state governments should have the rigt to approve mining plans of opencast mines with a workforce of 250, or underground mines with a manpower strength of 50 miners. The proposed Bill will delegate powers to approve 80 per cent of the mining plans to the states, since most investment plans in mining are for small reserves.

It will also significantly speed up theprocessing of investments in minerals like clays and dolomite, which are usually extracted from such ``small'' mines. The panel also suggested that states be allowed to lease out mining blocks that are not essentially continguous.

When granting mining leases (now restricted to minor minerals) states only have the authority to approve ``compact leases.'' The rule will be relaxed to enable state governments to approve mining leases that are not necessarily all in one block. The draft Bill will essentially attempt to make the mining laws relevant to the times, by snipping away unnecessary red tape. The first attempt was made in 1993, when the private sector acquired the right to mine 13 minerals reserved only for public sector undertakings.