Parliament (Rajya Sabha) on 19th August 2025 passed the Mines and Minerals (Development and Regulation) Amendment Bill, 2025, marking a significant step towards modernizing India’s mining framework. The Bill, which amends the Mines and Minerals Act, 1957, had earlier passed by the Lok Sabha and was approved by the Rajya Sabha through a voice vote. Nineteen members participated in the debate, with several highlighting the urgent need to liberalize the mining sector and reduce dependence on imports of critical minerals.
Union Coal and Mines Minister G. Kishan Reddy, while replying to the debate, said the amendment empowers leaseholders to add other minerals, including critical ones like Lithium, Nickel, and Cobalt, to existing leases without additional charges. For other minerals, royalties and premiums will continue to apply. The Bill expands the role of the National Mineral Exploration Trust, renaming it the National Mineral Exploration and Development Trust, and increasing the royalty contribution rate from 2% to 3%. The Trust will now fund both exploration and mine development projects, within India and abroad.
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Policy Shift Balances Commercial Freedom with Stronger Oversight
The legislation removes the 50% sale cap on captive mines, allowing them to sell output freely after meeting end-use requirements. It also empowers State Governments to permit disposal of mineral dumps and introduces limited lease extensions for deep-seated minerals. Another major provision is the creation of regulated mineral exchanges to ensure transparency, prevent insider trading, and modernize mineral trade. The Government has emphasized that reforms since 2015 have been driven by transparency, technology adoption, and effective utilization of CSR funds in mining areas.
Benefits of the Amended Act
The passage of the Bill is expected to deliver wide ranging benefits to India’s mineral economy. Critical and strategic minerals, which are essential for electric vehicles, renewable energy, and advanced manufacturing, have so far been heavily import dependent. The amendment aims to secure supplies through domestic exploration and overseas acquisitions. Expanded funding through the National Mineral Exploration and Development Trust will enable greater resource diversification, while liberalized rules for captive mines will increase domestic availability. Provisions for mineral exchanges are likely to attract private investment and bring trading practices in line with global standards. Overall, the Act is being seen as a forward looking reform that not only strengthens India’s mineral security but also balances growth with sustainability and community participation.
Also Read: Lease Period of Vijay-2 Iron Ore Mine of Tata Steel Expired
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