New Delhi: From illegal mining scam taking a toll on first BJP-led government in South India to the Centre clearing decks for enactment of landmark new mines bill, events occupying centrestage at India's mineral sector in 2011 were no less than an action-packed thriller.

Grabbing headlines throughout the year, the mining space saw frantic activities, including a ministerial panel holding marathon meetings to finalise draft bill for the sector with a equity sharing provision, fiercely opposed by the industry to illegal mining in many parts.

Much heat was generated over new bill 'Mines and Mineral (Development) and Regulation (MMDR)' during the year, to govern the sector housing globally significant resources of over 60 metallic and non-metallic minerals with India ranking among top five nations as far as coal and iron ore reserves are concerned.

The Group of Ministers (GoM), headed by Finance Minister Pranab Mukherjee could reach a consensus and it could be approved by Union Cabinet on September 30. The legislation awaits Parliament nod after introduction during the Winter session.

The Bill provides for coal miners to share 26 per cent of their net profits with the people affected by their projects, while the burden on the non-coal miners will be amount equivalent to royalty.

The Bill was vehemently opposed by industry bodies FIMI and FICCI, besides major industrial houses, saying it will choke investments in the sector and will replace the 54-year-old legislation.

Mines Minister Dinsha Patel exudes confidence that apart from addressing the burning issue of illegal mining, the new legislation will bring "a complete and holistic reform in the mining sector with provisions to address issues relating to sustainable mining and local area development, benefit sharing mechanism to people affected by mining projects.".

The legislation will also ensure "transparency, equity elimination of discretions, effective redressal and regulatory mechanisms", he said.

Meanwhile, despite an outrage against illegal mining in mineral-rich states, including Karnataka, the menace remains largely unchecked.

Karnataka's iron ore-rich Bellary hogged the limelight due to infamous illegal mining scam and ultimately rocked by it in the wake of a damning indictment by a Lokayukta report on the scam, forcing B S Yeddyurappa to resign as chief minister of the maiden BJP government in the South in July.

The Lokayukta in his explosive report on massive illegal mining had identified a large number of officials in the scam and many heads are likely to roll.

At the fag-end of the year, a case was also filed against External Affairs Minister S M Krishna for alleged issuance of licences for mining during his tenure as Chief Minister, on which the Minister has expressed confidence that the judiciary will put to rest "unholy attempts" at his character assassination.

The Justice M B Shah Commission on illegal mining has pointed out to an "unholy nexus between law makers and law breakers" and has suggested banning exports of iron ore running into billions of rupees warning that such activities could influence state policies.

"Export of 92 per cent of iron ore fines to China to fulfil its requirements, led to increase in illegal mining... This has increased menace of mafia controlling mining activities ...it has given unimaginable huge profits," the Commission said in its first interim report, which too occupied top slots in media.

The report said, "It would be difficult to break unholy nexus between law keepers and law breakers because the corruption is likely to flourish." The Mines Ministry said it was "lack of governance" at state levels which led to the menace.

A huge number illegal mining cases were unearthed during the year which are likely to surpass the numbers of last year -- 82,330 cases.

Iron ore reserves in the country are estimated at about 23 billion tonnes and account for about 6 per cent of global reserves.

The coal reserves, on the other hand are reported to be around 255 billion tonnes with India being third largest producer globally.

However, the irony is that only 10 per cent of the country's landmass has been explored.

Less exploration is attributed to bureaucratic tangles and less budgetary provisions and strategic plan -- "Unlocking the Potential of the Indian Minerals Sector" made by the Ministry this year addresses the issues.

The Ministry said the strategic plan addresses six priorities including "expanding reserve base by stepping up exploration and aiding international acquisition of strategic minerals besides reducing permit delays to create a more favourable policy environment."

Among other achievements, included the Ministry engaging "an expert consultant for creating a Sustainable Development Framework for the mining sector based on recommendations of a high-level committee appointed by the Planning Commission.

Steps were initiated that nearly 47,000 applications pending for mineral concessions across the country be expedited as the the Centre repeatedly asked states to undertake special drive to dispose them.

The year also saw restructuring of the Geological Survey of India (GSI) to enhance its capacity and capability especially in identifying, delineating prospective areas of mineral resources.

An expert group was also formed in the year to review the royalty rates, due for revision next year, for all major minerals other than coal, lignite and sand.

There are 51 minerals prescribed in MMDR Act, 1957 and the rates vary from mineral to mineral. The royalty on iron ore is 10 per cent at present.