Image source: https://pixabay.com/photos/mining-iron-ore-mine-transport-856003/

India has introduced new rules to make it easier for companies to access and produce critical minerals, especially those used in modern industries such as electric vehicles, electronics, and defence manufacturing.

The revisions, which came into effect on March 30, 2026, follow last year’s amendments to the Mines and Minerals (Development and Regulation) Act, 1957, as part of efforts to strengthen domestic supply at a time when demand for these materials continues to grow.

Addressing Fragmented Mineral Deposits

One of the most notable rule changes addresses a long-standing operational issue. While mineral deposits do not follow neat boundaries, mining leases do. The new rules allow companies to extend their lease areas into adjoining land, within defined limits, through a one-time approval.

For standard mining leases, the expansion is capped at 10 percent. For composite licences, which combine prospecting and mining rights, the cap is 30 percent.

In practice, this means operators can pursue deposits that spill over into nearby ground without having to restart the licensing process from scratch.

How the Additional Area Will Be Charged

The government has also set clear terms for how production from these expanded areas will be treated. Companies that secured their leases through auction will pay 10 percent of the auction premium on minerals produced from the added land. Those holding older, non-auctioned leases will pay based on the standard royalty.

The distinction reflects how the original leases were granted, while still allowing expansion within a defined structure.

Faster Process for Adding Minerals to Existing Leases

Another important change concerns a situation miners often face: a lease being granted for one mineral, with further exploration revealing others.

Under the revised rules, companies can apply to include additional minerals in their existing lease, with state governments required to respond within 30 days. If the minerals fall into the categories of critical, strategic, or deep-seated, no additional payment is required to add them.

This removes a layer of delay that has, in the past, slowed down the development of such resources.

Clearer Rules When Bigger Deposits Are Found

The updated framework also spells out what happens when more valuable minerals are discovered in areas originally approved for minor mineral extraction.

If exploration reveals major minerals, that portion of the area must be separated and auctioned as a major mineral block. Going forward, new leases for minor minerals, except sand, will only be granted after exploration has reached at least the G3 level.

Captive Mines Gain Flexibility to Sell Surplus

The changes extend to captive mines as well. Operators are now allowed to sell surplus production, provided they have first met the needs of their own end-use plants, which are running at full capacity.

If those plants are not operating at full capacity, sales will be limited to what the plant typically consumes in a year. The move is expected to release more material into the market without affecting the primary purpose of captive mining.

A Measured Shift Toward Greater Output

While the changes are not an overhaul of India’s mining system, they address several practical constraints that have caused issues for projects across the country.

By allowing limited expansion, setting firm timelines, and clarifying how previously unclear situations are handled, the revised rules are expected to support higher mineral output within India’s domestic supply chain.