Parliament passes Mines and Minerals Amendment Bill
Parliament passed the Mines and Minerals (Development and Regulation) Amendment Bill, 2026, amending the parent Mines and Minerals (Development and Regulation) Act, 1957
The Bill allows existing mining lease holders to add critical minerals such as lithium, graphite, nickel, cobalt, gold, and silver to their existing leases without an additional payment
The Bill removes the existing cap on the share of mineral output that captive mines may sell in the open market
For deep-seated minerals (occurring below 200 metres), the Bill allows a one-time extension of the leased area — up to 30% for a composite licence and up to 10% for a mining lease
It also proposes an authority for registration and regulation of mineral exchanges, and widens the scope of the National Mineral Exploration Trust to include mine development
The Bill will become law after it receives the President's assent
MMDR Act, 1957 and the Move to Auction-Based Allocation
The Mines and Minerals (Development and Regulation) Act, 1957 is the principal legislation governing mineral exploration, mining leases, and mineral development in India, enacted under Entry 54 of the Union List (regulation of mines and mineral development declared expedient in the public interest). The Act has been amended repeatedly — most significantly in 2015 (introducing auctioning of mineral concessions, NMET, and District Mineral Foundation) and in 2023 (introducing the "exploration licence" for deep-seated and critical minerals).
Key Details
- 2015 amendment: mandated auctioning (rather than discretionary allotment) of mining leases and prospecting licences; introduced Section 9B (District Mineral Foundation) and Section 9C (National Mineral Exploration Trust)
- 2023 amendment: introduced a new "exploration licence," granted through auction, for reconnaissance and prospecting of 29 critical and deep-seated minerals listed in a new Seventh Schedule; also removed 6 minerals from the atomic minerals list to open them to private exploration
- Union Ministry of Mines has notified a list of critical minerals — including lithium, cobalt, nickel, graphite, and rare earth elements — considered essential for clean energy, electronics, and defence applications
The 2026 Bill builds directly on the 2023 exploration-licence framework by letting existing leaseholders add critical minerals to their leases without fresh payment, aiming to fast-track critical mineral production using infrastructure already in place rather than waiting for new auctions.
National Mineral Exploration Trust (NMET) — Section 9C
The NMET was established in August 2015 under Section 9C of the MMDR Act to fund and promote regional and detailed mineral exploration in India, addressing the country's historic under-exploration of its mineral wealth compared to global peers. It is funded through a statutory contribution from leaseholders.
Key Details
- Leaseholders contribute 2% of royalty paid to NMET (Section 9C(2))
- NMET funds are used to commission exploration projects, often through public-sector exploration agencies such as the Geological Survey of India and Mineral Exploration and Consultancy Limited
- The 2026 Bill expands NMET's mandate beyond exploration to also cover mine development, reflecting a policy shift toward faster conversion of exploration data into producing mines
Widening NMET's scope to fund mine development (not just exploration) is intended to shorten the lag between discovering a critical mineral deposit and bringing it into production — a bottleneck India has faced in scaling up domestic critical mineral supply.
Captive Mining and the Open-Market Sale Cap
"Captive" mines are those allocated or leased for a specified end-use (for example, a mine linked to a power plant or a steel plant), as opposed to "merchant" mines that can freely sell output in the open market. The MMDR Amendment Act, 2021 permitted captive mines (other than atomic minerals) to sell up to 50% of their annual mineral production in the open market after meeting their own captive requirement, raising this from an earlier 25% ceiling.
Key Details
- The 50% captive-sale cap traces to the 2021 amendment; the 2026 Bill removes this ceiling for non-coal minerals, allowing captive mines to sell their entire surplus output commercially
- This is separate from, but analogous to, a related move in the coal sector to relax captive-sale restrictions on legacy coal stocks
- Removing the cap is intended to bring idle/underused captive production capacity into the formal minerals market, increasing overall domestic mineral output
Uncapping captive sales, combined with easier addition of critical minerals to existing leases, is the Bill's core strategy to raise India's critical mineral output without waiting for new mines to be auctioned and developed from scratch.
Deep-Seated Minerals and Composite Licensing
"Deep-seated" minerals are those occurring below 200 metres from the surface, which typically require more capital-intensive, higher-risk exploration than near-surface deposits. The 2023 MMDR amendment created the "composite licence" — combining exploration and mining rights in a single instrument — specifically to attract private investment into such higher-risk deep-seated and critical mineral exploration.
Key Details
- The 2026 Bill allows a one-time area extension for deep-seated mineral operations: up to 30% additional area under a composite licence, and up to 10% additional area under a mining lease
- This addresses a practical problem where deposits identified through exploration extend beyond the originally licensed area boundary, previously requiring a fresh licensing round
- The Bill also proposes an authority to register and regulate "mineral exchanges" — platforms intended to create transparent price discovery for traded minerals, similar in spirit to commodity exchanges regulated by SEBI
The area-extension provision and the proposed mineral exchange authority are aimed at removing the administrative friction that has historically slowed conversion of exploration success into actual critical mineral production and trade in India.
- Bill introduced in Lok Sabha: August 10, 2026
- Passed by Lok Sabha: August 12, 2026
- Passed by Rajya Sabha: August 13, 2026 (becomes law after Presidential assent)
- Parent Act: Mines and Minerals (Development and Regulation) Act, 1957
- Deep-seated minerals defined as occurring below 200 metres from the surface
- Area extension allowed: up to 30% under composite licence, up to 10% under mining lease (one-time)
- Captive mine open-market sale cap: introduced at 25%, raised to 50% by the 2021 amendment, now removed for non-coal minerals by the 2026 Bill
- NMET leaseholder contribution: 2% of royalty paid (Section 9C(2), MMDR Act 1957)
- Critical minerals named in reports on the Bill: lithium, graphite, nickel, cobalt, gold, silver
- 2023 amendment introduced 29-mineral "exploration licence" list under a new Seventh Schedule to the Act