Cabinet clears amendments to mining law

New Delhi: The government cleared amendments to the mining law to remove restrictive end-use conditions on captive mines and resolve legacy issues, unlocking more blocks for auction. These changes will allow the auction of more than 500 mines for gold, diamond, platinum, copper, zinc and lead among others, and are expected to attract big-ticket investment from mining giants.

The cabinet meeting on Wednesday chaired by Prime Minister Narendra Modi approved structural reforms in the mining sector through legislative amendments to the Mines and Mineral (Development and Regulation), 1957, or MMDR Act, said a person aware of the development.

These aim to end the distinction between captive and merchant mines, allowing even those allocated for captive use to sell up to 50% of minerals excavated in a year. The amendments are likely to be moved for the consideration of Parliament in the upcoming budget session.


The amendment is made to Section 10A(2)(b) of MMDR Act, 1957, which pertains to leases where reconnaissance permits or prospecting licences were granted.

Transfer of Non-Auctioned Mines

Another amendment deals with Section 10A(2)(c), which relates to grant of mining leases to resolve legacy issues and allows reallocation of mines through auctions, the person said.

Many mining leases are currently stuck in legacy cases and can neither be granted because of the time in which this could be done is over, nor be brought to auction because of the legal impasse. Companies will get incentives for early production from blocks to be won in auction under the proposed changes.

No charges will be levied on those wanting to transfer non-auctioned mines, which will ensure that leases not being exploited are sold or transferred to those willing to bring in investment.

Additionally, government companies will also be levied charges on the extension of mining leases to create a level playing field in the sector. Also approved by the cabinet are legislative changes for the reallocation of non-producing blocks owned by government companies, a comprehensive licence for exploration and production, avoidance of double taxation, clarity in illegal mining, setting up a national mineral index and joint auctions of bauxite and coal mines for the aluminium sector, and local utilisation of the district mineral fund.