The government introduced new mining rules to improve access to critical minerals, which are essential for fast-growing industries such as electric vehicles (EVs), electronics, renewable energy systems, and defence manufacturing. The revised regulations came into effect on March 30, 2026, following amendments to the Mines and Minerals (Development and Regulation) Act, 1957. Through these reforms, the government aims to strengthen domestic supply chains and reduce dependence on imported mineral resources as demand for critical materials continues to rise.
Addressing the Challenge of Fragmented Mineral Deposits
One of the most significant changes addresses a common operational challenge in the mining sector. Mineral deposits often extend beyond the boundaries of existing mining leases, creating complications for companies attempting to extract the full resource. To solve this issue, the new rules allow mining companies to expand their lease areas into adjoining land through a one-time approval process, within defined limits.
Under the revised framework, standard mining leases can expand by up to ten percent of the existing area, composite licences, which combine prospecting and mining rights, can expand by up to thirty percent. As a result, operators can now access mineral deposits that extend into nearby areas without restarting the entire licensing process, thereby improving operational efficiency.
Faster Approval for Adding New Minerals to Existing Leases
Mining projects often uncover additional minerals during exploration that were not part of the original lease agreement. Previously, obtaining approval to extract these newly discovered resources could take considerable time. Under the revised rules, companies can now apply to add newly discovered minerals to their existing lease, and state governments must respond within 30 days.
Moreover, if the newly discovered minerals fall under critical, strategic, or deep-seated categories, companies will not be required to make additional payments to include them in the lease. The change is expected to speed up resource development and improve the utilisation of mineral-rich areas.
Clearer Guidelines When Major Minerals Are Discovered
The updated rules also introduce clear procedures when exploration reveals major minerals in areas originally approved for minor mineral extraction. In such cases, the portion containing major minerals must be separated, the identified block must then be auctioned as a major mineral block. The government has tightened exploration requirements for new minor mineral leases. Except for sand mining, new leases will only be granted after exploration reaches at least the G3 level, ensuring better geological understanding before mining begins.
Greater Flexibility for Captive Mines
The reforms also provide greater operational flexibility for captive mines, which primarily supply minerals to their own industrial plants. Under the new rules, captive mine operators can sell surplus production in the open market, provided their end-use plants are operating at full capacity. If the plants are operating below full capacity, sales will be limited to the plant’s typical annual consumption. This measure aims to increase mineral availability in the domestic market while preserving the primary purpose of captive mining operations.
Supporting India’s Critical Mineral Supply Chain
Although the revised rules do not overhaul the entire mining framework, they address several practical challenges that have slowed mineral development projects in the past. As reported by miningfeeds.com, as industries such as electric mobility, clean energy, and advanced manufacturing expand rapidly, these policy changes are expected to play an important role in securing the mineral resources needed for India’s future economic growth.
