Parliament passed the Mines and Minerals (Development and Regulation) Amendment Bill, 2025 during the Monsoon Session, with the Lok Sabha clearing the legislation on 12 August 2025 and the Rajya Sabha following on 19 August 2025. The amendment introduces electronic mineral exchanges, removes caps on captive mine sales, and expands lease areas for deep-seated mineral extraction — changes aimed at boosting India's domestic mineral production and reducing import dependence for critical minerals.
Background
The Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act) has been the principal statute governing mineral exploration and mining in India. While the Act has been amended multiple times, the government identified several structural impediments to scaling up mineral production, particularly for critical minerals essential to India's energy transition, defence manufacturing, and electronics sectors.
India imports a substantial proportion of its critical mineral requirements. The amendment seeks to create market-based mechanisms for mineral trading while simultaneously expanding the commercial freedom of mining lessees to increase output from existing operations.
Key Provisions
Mineral exchanges: The Act introduces the concept of a "mineral exchange" — a registered electronic trading platform for minerals and metals. The central government will frame rules governing registration, fee structures, prevention of insider trading and market manipulation, and grievance redressal mechanisms for these exchanges.
Removal of captive mine sale limits: Under the existing regime, captive mines could sell up to 50% of minerals produced in a year after meeting end-use requirements. The amendment removes this cap entirely, allowing captive mine operators to sell their full output on the open market.
Lease area extensions: The amendment permits one-time extensions of mining lease areas for deep-seated minerals — up to 30% of the existing leased area under a composite licence, and up to 10% under a mining lease. This addresses the practical constraint that deep-seated mineral deposits often extend beyond originally surveyed lease boundaries.
Addition of minerals to existing leases: Leaseholders can now add other minerals discovered within their leased area to the scope of their existing lease, avoiding the need to obtain separate concessions for incidental mineral finds.
Sale of mineral dumps: The amendment facilitates the sale of accumulated mineral dumps, addressing both the economic value locked in historical waste and the environmental hazards posed by unmanaged dump sites.
Implications for Practitioners
The introduction of mineral exchanges represents a structural shift in how minerals are traded in India. Practitioners advising mining companies should prepare for a regulatory framework that borrows concepts from securities market regulation — including insider trading prohibitions and market manipulation safeguards — applied to commodity trading.
The removal of the 50% sale cap for captive mines is significant for end-use industries such as steel, cement, and power generation that have traditionally held captive mining leases. These entities will now need to evaluate whether commercial sale of minerals offers better returns than captive consumption, potentially restructuring their mining operations.
For companies holding existing mining leases in areas with deep-seated deposits, the lease extension provisions create an opportunity to expand operations without the uncertainty and delay of fresh auction processes. However, the specific procedures and conditions for extensions will depend on rules yet to be notified.