New Delhi: Draft rules of the amended Mines and Minerals Development and Regulation (MMDR) Act will be circulated to states in a week, steel and mines minister Narendra Singh Tomar said on Thursday.

“The new Act will result in simplification of procedures and avoidance of delay in the mining sector," Tomar told a press conference in New Delhi.

The amendment removes the need for prior approval of the central government for grant of mineral concessions. Also, approval of mining plans by the central government would no longer be mandatory as a provision has been added under Section 5(2)(b) permitting state governments to devise a system for filing of a mining plan.

All mineral concessions, which are granted by the respective state governments, would take place through auctions.

“This (auctions) will bring in greater transparency and remove discretion. This should also mean that the Government will get an increased share from the mining sector," said a press release issued by the ministry on Thursday.

These auctions are expected to follow a template similar to the one being executed in the ongoing coal block auctions. States are set to receive Rs. 2.097 trillion in bids from the first two rounds of coal block auction.

Mining leases will be extended from the date of their last renewal up to 31 March, 2030 (for captive miners) and till 31 March, 2020 (for merchant miners) or till the completion of the period of renewal already granted, if any, whichever is later.

“It is expected that this would immediately permit mines that have got closed due to want of decisions on their applications for second and subsequent renewals to start their operations, subject to the necessary clearances like forest and environment," said the press release.

Unlike in the 1957 Act, there would be no //provision for// renewal of any mining concession. The tenure of mineral concessions has been increased from the existing 30 years to 50 years. Thereafter, all mining leases would be put up for auction and not for renewal as in the earlier system.

“The approval of the central government for grant of mineral concession will not be mandatory except for Atomic Minerals and enabling powers for reservation for the public sector," said Tomar.

The Minister said that the MMDR Act makes it compulsory for state governments to set up District Mineral Foundations (DMF) in all districts where mining takes place.

“This is designed to address a long-time grievance of civil society that people affected by mining are not cared for," said Tomar.

The Amendment proposes to set up a National Mineral Exploration Trust created from contributions from mining lease holders.

“This would allow the Government to have a dedicated fund for undertaking exploration. In addition, the transferability provision (in respect of mining leases to be granted through auctions) would permit flow of greater investment to the sector and increasing efficiency in mining," said the statement.