The Lok Sabha has passed the Mines and Minerals (Development and Regulation) Amendment Bill, 2026, aimed at improving the exploration and development of critical and strategic minerals. This legislation, approved on August 13, proposes significant changes to the existing Mines and Minerals (Development and Regulation) Act of 1957, allowing greater flexibility for mining lease holders.

One of the primary provisions of the Amendment Bill includes permitting lease holders to request the inclusion of additional minerals into their existing mining leases. For certain critical and strategic minerals, such as lithium, graphite, nickel, cobalt, gold, and silver, there will be no additional payment required. However, for other types of minerals, the lease holder will need to pay an amount equivalent to the applicable royalty.

Notably, in case of auctioned mines, an auction premium corresponding to the included mineral will also be due. The Central government will retain the authority to modify these payment requirements via a notification.

Changes to the Mineral Leasing Process

An important aspect of the proposed legislation is the facilitation of including minor minerals within leases granted for major minerals. The state government will have the discretion to establish the royalty and other payments in such cases. Minor minerals, which include building stones, gravel, and sand, are identified as essential components of construction and infrastructure.

For the inclusion of major minerals in leases originally granted for minor minerals, the Central Government is expected to set specific conditions through new regulations. There are limitations, however, as atomic minerals above a certain grade cannot be included in leases designed for non-atomic minerals.

The Amendment Bill also aims to broaden the scope of the National Mineral Exploration Trust, which currently funds mineral exploration activities. Under the new provisions, this Trust will also be empowered to finance the development of mines, subsequently being renamed the National Mineral Exploration and Development Trust.

Regulatory and Operational Enhancements

The Bill seeks to eliminate the current cap on the sale of minerals harvested from captive mines, which are presently restricted to selling up to fifty per cent of their annual production after fulfilling end-use requirements. The removal of this limit is anticipated to enhance operational efficiency for these mining entities.

Furthermore, state governments will be authorised to allow the sale of mineral dumps accumulated within the leased areas until a date specified by the Central government, facilitating better resource management and utilisation.

For accessing deep-seated minerals found at depths exceeding 200 metres, the proposed legislation includes provisions for a one-time extension of the current leases. This could extend mining or composite leases by up to thirty per cent of the existing area for composite licences and by ten per cent for standard mining leases.

Additionally, the establishment of an authority for registering and regulating mineral exchanges is included, which would create a recognised electronic marketplace for trading minerals and metals, contributing to enhanced transparency and efficiency in mineral trading.

The changes introduced aim to diversify the mineral resource base accessible to miners, promote exploration and development of critical minerals, and improve trading conditions for mineral resources. This legislative update signifies a concerted effort to modernise India’s mining sector for future sustainability and growth.

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