The ministry of mines has dropped a proposal to restrict initial search for mineralisation done under reconnaissance permits. The ministry is finalising amendments to the mining law.

Officials said the ministry had circulated a Cabinet note on amendments to the Mines and Minerals (Development And Regulation) Act. Prior to seeking Cabinet approval, Mines and Steel Minister Narendra Singh Tomar convened a meeting of senior officials from the ministries of law, atomic energy, finance, coal and mines. Their comments are expected to be finalised by December 29.

In an earlier draft amendment put up for discussion, it was proposed private companies not be given reconnaissance permits needed to identify areas of enhanced mineral potential through remote sensing, aerial reconnaissance and ground sampling.

Following discussions, officials said the ministry had decided on an open policy for reconnaissance permits, allowing more than one player in an area. Besides, existing holders of permits will have the right to obtain prospecting licences or mining leases.

In the new amendment draft order, yet to be cleared by Cabinet, the government has classified minerals into two categories, notified and non-notified. Bulk minerals like iron, limestone, manganese and bauxite, which account for 85 per cent of India's mineral production, have been categorised as notified minerals. All other minerals are to be considered non-notified.

According to industry experts, the government does not have the wherewithal for large-scale reconnaissance. The Federation of Indian Mineral Industries (FIMI) said, "To assume that there is enough knowledge up to the prospecting level for notified minerals at the level of state governments or the Geological Survey of India (GSI) shows how far from reality is the central government."

The FIMI also argued the assumption that some minerals were surficial was erroneous. There are a number of underground manganese and chrome mines in Madhya Pradesh, Maharashtra and Odisha. Even for iron or bauxite, there was no such thing as surficial, many iron mines in Goa had gone below sea level, it said. "To auction on the basis of limited knowledge available with state governments or the GSI is to botch the whole scheme," it added.