On March 30, 2026, the Ministry of Mines notified the Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession (Second Amendment) Rules, 2026. This regulatory update provides the technical implementation framework for the legislative reforms introduced by the Mines and Minerals (Development and Regulation) (MMDR) Amendment Act, 2025, which came into effect on September 1, 2025. The 2026 Rules specifically target the expansion of domestic production for strategic and deep-seated resources, streamlining administrative protocols to reduce the country’s high import dependency on essential industrial inputs.
Provisions for Contiguous Area Expansion
The 2026 Amendment Rules introduce a one-time mechanism allowing leaseholders to expand their operational footprint into adjoining areas without undergoing a fresh auction process. This provision is intended to facilitate the optimal extraction of mineral extensions—deposits that are geologically continuous with the existing lease but are not of sufficient size or orientation to be economically viable as independent mining blocks.
To maintain regulatory oversight and prevent excessive land accumulation, the expansion is subject to strict limits based on the original licence category:
Contiguous Expansion Limits by Licence Type
| Licence Category | Maximum Allowable Expansion (% of original area) |
| Mining Lease (ML) | 10% |
| Composite Licence (CL) | 30% |
Financial Framework for Expanded Areas
To ensure State Governments receive proportional revenue from these additional territories, the rules establish a differentiated payment structure based on the original acquisition method of the lease:
- Auctioned Leases: For leases originally granted through competitive bidding, the lessee must pay an additional amount equivalent to 10% of the auction premium on all minerals dispatched from the newly added contiguous area.
- Non-Auctioned (Legacy) Leases: For leases granted under the older regulatory regime, the lessee is required to make a payment equivalent to the standard royalty on any minerals extracted from the expanded area.
Streamlined Mechanism for Associated and Additional Minerals
The amendment addresses long-standing bottlenecks in resource utilization by simplifying the process for including associated major or minor minerals discovered within a leasehold.
- 30-day Service Level Agreement (SLA): State Governments are now mandated to approve applications for the inclusion of associated minerals within a strict 30-day timeframe, significantly improving the ease of doing business.
- Seventh Schedule Exemption: In a strategic effort to incentivize the production of resources that are typically limited in quantity and difficult to process, no additional payment is required for the inclusion of minerals listed in the Seventh Schedule (covering critical, strategic, and deep-seated minerals).
This exemption is specifically designed to encourage the extraction of strategic minerals that occur alongside more common deposits but might otherwise be discarded due to high technical complexity and cost.
Liberalization of Captive Mine Operations
The 2026 Rules finalize the removal of earlier restrictions that limited the sale of minerals from captive mines. This shift is intended to increase total market supply and support the domestic industrial ecosystem, particularly Micro, Small, and Medium Enterprises (MSMEs). The disposal of surplus minerals is now governed by a two-tier condition:
Full Capacity Operations
If the end-use plant linked to the captive mine is operating at its full capacity, operators are permitted to sell any surplus minerals produced after the plant’s requirements are satisfied.
Partial Capacity Operations
If the plant is operating below its full capacity, the sale of surplus minerals is restricted to a quantity equivalent to the actual amount consumed by the plant during that specific financial year.
Framework for Minor Mineral Leases
The amendment introduces rigorous exploration standards for the future grant of minor mineral leases (excluding sand) to prevent the loss of high-value resources:
- Mandatory Exploration: State Governments must ensure a mineral area has been explored to the G3-level (preliminary exploration) before a mining lease can be granted.
- Major Mineral Discovery Protocol: To prevent the bypassing of the competitive auction regime, if exploration for minor minerals identifies a major mineral deposit, the area must be auctioned as a major mineral block rather than being granted as a minor mineral lease.
Legal Basis and Regulatory Oversight
The primary legal authority for these rules is the Mines and Minerals (Development and Regulation) Act, 1957, as amended by the 2025 Act. Technical oversight for the implementation of these rules is provided by the Indian Bureau of Mines (IBM). Established in 1948 and headquartered in Nagpur, the IBM serves as the apex regulatory body under the Ministry of Mines. It is responsible for ensuring scientific and sustainable mining practices across the sector, with the specific exclusion of coal, petroleum, natural gas, and atomic minerals.
The notification of these rules followed an extensive consultation process involving State Governments, Central Ministries, and industry stakeholders to ensure a balance between resource security and operational feasibility.
Key Technical Specifications Summary Table
Technical Summary of 2026 Amendment Rules
| Feature | Specification |
| Notification Date | March 30, 2026 |
| Approval Timeline for Associated Minerals | 30 Days |
| Seventh Schedule Mineral Surcharge | Zero / No Additional Payment |
| Minor Mineral Exploration Standard | G3 Level |
| Expansion Limit (Mining Lease) | 10% |
| Expansion Limit (Composite Licence) | 30% |
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