The ministry of mines amended the Minerals (Other than Atomic and Hydrocarbons Energy Minerals) Concession (Second Amendment) Rules, 2026, introducing new provisions aimed at strengthening the exploration and production of critical and deep-seated minerals in India. The amendments allow the inclusion of contiguous areas and additional minerals within existing mining leases, enabling mining companies to expand operations and improve extraction efficiency.
Framework for Expanding Mining Lease Areas
Under the revised rules, the government has created a clear framework for extending mining lease (ML) and composite licence (CL) areas to include adjacent or contiguous areas. Leaseholders can now apply for a one-time extension to incorporate nearby areas into their existing leases. However, the expansion is subject to specific limits up to ten percent additional area for mining leases and up to thirty percent additional area for composite licences. These provisions are expected to improve operational efficiency and resource utilization, particularly for deposits that extend beyond existing lease boundaries.
Alignment with the MMDR Amendment Act, 2025
The new rules follow the amendments made to the Mines and Minerals (Development and Regulation) Act, 1957, through the MMDR Amendment Act, 2025, which came into effect on September 1, 2025. According to the Ministry of Mines, the reforms are designed to accelerate exploration, increase domestic mineral production, and strengthen India’s critical mineral supply chain.
Revised Payment Structure for Expanded Lease Areas
The amendment also introduces payment provisions for minerals extracted from newly added areas. For auctioned leases, leaseholders must pay 10% of the auction premium on minerals produced from the additional area. For non-auctioned leases, companies will be required to pay an additional amount equivalent to the royalty. These measures ensure that the expansion of lease areas continues to generate revenue for State Governments while supporting increased mineral output.
Encouraging Extraction of Deep-Seated Minerals
The inclusion of contiguous areas is expected to facilitate the extraction of deep-seated minerals, which often extend across multiple geological zones. By allowing lease expansion rather than separate auctions, the government aims to make mineral extraction more commercially viable and operationally efficient. In addition, the rules introduce a time-bound mechanism for including additional minerals in existing leases, requiring State Governments to process such applications within 30 days. Importantly, no additional payment will be required for including critical, strategic, or specified deep-seated minerals, a move intended to encourage their exploration and production.
Improving Ease of Doing Business in the Mining Sector
The Ministry of Mines stated that the amendments aim to simplify regulatory procedures, improve ease of doing business, and enhance mineral production. By encouraging exploration of critical and deep-seated minerals, the reforms are also expected to strengthen India’s mineral security and generate higher revenue for State Governments. As reported by knnindia.co.in, the changes represent a significant step toward building a more efficient and self-reliant mineral supply ecosystem in India.
