Govt Notifies Amendments To Strengthen Critical Mineral Production

It also enables inclusion of additional minerals, covering both major and minor categories, within existing leases. These changes follow amendments to the Mines and Minerals (Development and Regulation) Act, 1957 through the MMDR Amendment Act, 2025, effective September 1, 2025. The Ministry of Mines said the reforms aim to boost exploration and production of critical minerals and improve domestic supply. Under the revised rules, leaseholders can apply for a one-time extension to include contiguous areas. The additional area is capped at 10 per cent for mining leases and 30 per cent for composite licences. In case of auctioned leases, the holder must pay 10 per cent of the auction premium on minerals extracted from the added area. For non-auctioned leases, an additional amount equal to royalty will apply. The inclusion of contiguous areas is expected to improve efficiency and enable extraction of deep-seated minerals that may not be viable under separate leases. The rules also introduce a time-bound mechanism for inclusion of additional minerals, mandating State Governments to process applications within 30 days. No extra payment will be required for inclusion of critical, strategic or specified deep-seated minerals, in a bid to incentivise their production. The amendment further provides a framework to include major minerals in leases originally granted for minor minerals before the 2025 Act. For future allocations, exploration up to G3 level has been made mandatory before grant of minor mineral leases, except for sand. If major minerals are discovered, the area will be auctioned as a major mineral block. In another key change, the cap on sale of minerals from captive mines has been removed. However, sales are permitted only after meeting the requirements of end-use plants. If plants operate below full capacity, sales will be limited to the quantity consumed annually. The changes are expected to improve mineral availability in the market, including for MSMEs. The Ministry of Mines said the amendments are aimed at simplifying procedures, improving ease of doing business, and increasing production of critical and deep-seated minerals, while also enhancing revenue prospects for State Governments. (KNN Bureau)