The Mines and Minerals (Development and Regulation) Amendment Bill-2025

The Mines and Minerals (Development and Regulation) Amendment Bill, 2025, introduced in the Lok Sabha, marks a significant milestone in India’s efforts to enhance the exploration, production, and regulation of critical and strategic minerals. This amendment to the Mines and Minerals (Development and Regulation) Act, 1957, aims to address the growing demand for minerals essential for economic growth and national security, while also promoting sustainable mining practices. Below, we delve into the key provisions, objectives, and implications of this landmark legislation.

Background and Need for the Amendment

The Mines and Minerals (Development and Regulation) Act, 1957, has been a cornerstone of India’s mineral policy, regulating the development and exploitation of mineral resources. Over the years, the Act has undergone several amendments to align with the evolving needs of the economy. The last amendment in 2023 introduced measures to boost exploration and production of critical minerals, reflecting their increasing importance in global supply chains.

Recent geopolitical developments have disrupted the supply chains of critical minerals, making India heavily reliant on imports. To address this challenge, the government launched the National Critical Mineral Mission, aimed at increasing domestic production, securing global supply chains, and promoting the processing of critical minerals. The 2025 amendment seeks to further support this mission by introducing measures to simplify mining regimes, promote zero-waste mining, and facilitate the extraction of deep-seated minerals.

Key Provisions of the Amendment Bill

The Bill introduces several transformative changes to the existing Act, including:

1. Expansion of the National Mineral Exploration Trust 

The scope of the National Mineral Exploration Trust (NMET) has been widened to include exploration and development activities within India, offshore areas, and even outside India.
The Trust has been renamed as the “National Mineral Exploration and Development Trust” to reflect its expanded mandate.
The payment to the Trust by lessees has been increased from 2% to 3% of the royalty payable, generating additional funds for exploration and development.

2. Inclusion of New Minerals in Mining Leases 

The Bill allows the inclusion of new minerals in existing mining leases, subject to conditions prescribed by the Central Government.
Critical and strategic minerals, as well as minerals specified in the Seventh Schedule, are exempt from additional payments to incentivize their production.

3. Extension of Mining Lease Areas 

Holders of mining leases for deep-seated minerals can apply for a one-time extension of their leased area to include contiguous areas, up to 10% for mining leases and 30% for composite licenses.
This provision aims to promote optimal mining of deep-seated minerals that are economically unviable under separate leases.

4. Development of Mineral Exchanges 

The Central Government is empowered to promote the development of mineral exchanges for trading minerals, concentrates, and processed forms.
These exchanges will ensure fair and transparent pricing, stabilize markets, and attract investment in the mining sector.

5. Removal of Sale Limits for Captive Mines 

The limit on the sale of minerals from captive mines has been removed, allowing miners to sell surplus minerals after meeting the requirements of linked end-use plants.

6. Sale of Dumps 

The Bill permits the sale of mineral dumps stacked in captive leases, reducing environmental hazards and increasing mineral availability in the market.

Financial Implications

The amendment is expected to generate significant financial resources for the NMET. With the increase in payment from 2% to 3% of royalty, the Trust is projected to accrue an additional corpus of ₹2,500 crore over the next five years. This funding will support the enhanced scope of the Trust under the National Critical Mineral Mission, with an estimated expenditure of ₹8,700 crore during the same period.

Delegated Legislation

The Bill empowers the Central Government to make rules for:

Additional payments for lease extensions.
Conditions for including new minerals in mining leases.
Regulation of mineral exchanges, including registration, oversight, and prevention of market manipulation.

These provisions ensure flexibility in implementing the Act while maintaining robust regulatory oversight.

Implications for the Mining Sector

The Mines and Minerals (Development and Regulation) Amendment Bill, 2025, is poised to transform India’s mining sector in several ways:

Boosting Domestic Production: By incentivizing the production of critical and strategic minerals, the Bill reduces India’s dependence on imports and strengthens national security.
Promoting Sustainable Mining: The focus on zero-waste mining and the sale of dumps aligns with environmental conservation goals.
Enhancing Market Dynamics: The establishment of mineral exchanges will create a transparent and efficient marketplace, benefiting miners and end-users alike.
Encouraging Investment: Simplified regimes and robust market mechanisms are expected to attract investment in mining and related infrastructure.

Conclusion

The Mines and Minerals (Development and Regulation) Amendment Bill, 2025, is a forward-looking legislation that addresses the challenges and opportunities in India’s mineral sector. By fostering exploration, production, and market development, the Bill not only supports the National Critical Mineral Mission but also contributes to the nation’s economic growth and sustainability goals. As India continues to navigate the complexities of global supply chains and environmental concerns, this amendment serves as a crucial step towards harnessing the full potential of its mineral resources.

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Source: Lok Sabha

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