Parliament passes MMDR Amendment Bill 2026 to boost critical mineral exploration

Parliament has passed the Mines and Minerals (Development and Regulation) Amendment Bill, 2026, after the Rajya Sabha cleared the legislation on Thursday, a day after it was passed by the Lok Sabha. The bill will become law after it receives the President's assent.

The Bill seeks to boost mineral exploration and development, particularly of critical and strategic minerals, while giving mining lease holders greater flexibility to include additional minerals in existing leases.

The legislation amends the Mines and Minerals (Development and Regulation) Act, 1957, allowing mining lease holders to approach state governments to add other minerals to an existing lease.


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Critical minerals to get special treatment

For the inclusion of critical and strategic minerals and other specified minerals such as lithium, graphite, nickel, cobalt, gold and silver, lease holders will not have to pay an additional amount.

For other minerals, lease holders will have to pay an amount equivalent to the applicable royalty. In the case of auctioned mines, the applicable auction premium for the additional mineral will also have to be paid. The Centre will have the power to modify these payment requirements through notification.

The Bill also allows minor minerals to be included in leases granted for major minerals. State governments will determine the royalty and other payments in such cases.

Minor minerals include building stones, gravel, sand and other minerals notified as minor minerals by the Centre.

Captive mines can sell more minerals

One of the key changes is the removal of the existing 50% ceiling on the sale of minerals produced from captive mines.

Currently, captive mines can sell up to half of their annual mineral production after meeting end-use requirements. The amendment seeks to remove this restriction, giving captive mine operators greater flexibility to sell their output.

State governments will also be empowered to permit the sale of mineral dumps accumulated within leased areas up to a date specified by the Centre.

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Mineral exploration trust to fund mine development

The Bill also expands the mandate of the National Mineral Exploration Trust.

The trust, currently focused on funding mineral exploration, will also be able to finance the development of mines and minerals. It will subsequently be renamed the National Mineral Exploration and Development Trust.

For deep-seated minerals found more than 200 metres below the surface, the legislation proposes a one-time expansion of the area covered by a mining or composite lease.

The area can be increased by up to 30% for a composite licence and up to 10% for a mining lease.

Mineral exchange regulator proposed

The legislation also proposes setting up an authority to register and regulate mineral exchanges.

A mineral exchange has been defined as a registered electronic trading platform or marketplace for trading minerals and metals.

The government has said the amendments will broaden the mineral resource base available to miners, encourage exploration and development of critical minerals and provide greater flexibility in the use and trading of mineral resources.

(With inputs from PTI)