The Ministry of Mines notified the Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession (Second Amendment) Rules, 2026, providing a detailed mechanism for inclusion of contiguous areas in mining leases and associated minerals in existing leases aimed at boosting production of critical and deep-seated minerals.
Legal Basis
The amendment follows the MMDR Amendment Act, 2025 (effective 1st September 2025), which amended the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act) to increase exploration and production of critical minerals.
Key Provisions of the Amendment
Inclusion of Contiguous Area in Mining Leases
- Holders of a Mining Lease (ML) or Composite Licence (CL) of deep-seated minerals can apply for a one-time extension to include a contiguous area.
- For ML: contiguous area shall not exceed 10% of existing area.
- For CL: contiguous area shall not exceed 30% of existing area.
- Payment conditions:
- Auctioned ML/CL — holder pays 10% of auction premium on minerals dispatched from added area.
- Non-auctioned lease — holder pays an amount equal to royalty on minerals dispatched from added area.
Inclusion of Associated Minerals
- Rules provide the manner for including any other mineral, including minor minerals, in an existing mining lease.
- State Governments mandated to permit such inclusion within 30 days of application.
- No additional amount applicable for inclusion of critical, strategic or deep-seated minerals listed in the Seventh Schedule of MMDR Act — to incentivise their production.
Minor Mineral Leases — Future Grants
- State Governments mandated that ML for minor minerals (other than sand) shall only be granted after exploration up to G3 level.
- If any major mineral is discovered during exploration, the State Government shall auction the area as a major mineral block.
Removal of Limit on Sale from Captive Mines
- Miners can now sell minerals after meeting the requirement of the linked end-use plant operating at full capacity.
- If end-use plant operates below full capacity, lessee may sell only quantity equal to minerals consumed in that financial year.
- This will increase mineral availability in the market, including for
Significance
- Promotes optimal mining of deep-seated minerals locked in contiguous areas that are otherwise not economically viable under separate leases.
- Strengthens Aatmanirbhar Bharat by increasing domestic supply of critical and strategic minerals.
- Enhances Ease of Doing Business in the mining sector through simple, time-bound provisions.
- Benefits State Governments through additional payments and increased production revenue.
- Greater mineral availability in market supports MSMEs and downstream industries.