Accelerating Mining Operations
Since the launch of India’s auction regime in 2015, 585 major mineral blocks—including 34 critical mineral blocks—have been successfully auctioned. Although initial progress was slow, the pace has accelerated in recent years, with over 100 blocks auctioned annually on average. In the first seven months of 2025 alone, 112 mineral blocks were auctioned.
While auctions have increased, operationalisation of these mines remained a challenge. To address this, the Ministry has established a Project Management Unit (PMU) and conducts regular meetings with successful bidders, state governments, and stakeholders to monitor progress.
Key Highlights of the Amendment
The recent amendment, effective from October 17, 2025, introduces intermediary timelines, incentives, and penalties, replacing the previous broad three-year timeframe (extendable by two years) for mining lease execution. Highlights include:
- Incentives for Early Production: For Mining Leases (ML), only 50% of the auction premium is payable on minerals dispatched earlier than five years from LoI. For Composite Licences (CL), the incentive applies for minerals dispatched earlier than seven years.
- Intermediate Milestones: For ML, milestones include approval of mining plan (6 months), environmental clearance (18 months), and execution of mining lease (12 months). For CL, additional milestones include execution of CL (12 months) and completion of G2-level prospecting (36 months).
- Penalties for Delay: Non-compliance attracts appropriation of bank guarantees at 1% per month of delay, adjustable against the auction premium if final milestone is achieved on time.
- Performance Security: Previously submitted 3–5 years post-LoI, now required before issuance of LoI, with 45 days to submit along with the first instalment of upfront payment.
- Automatic Declaration of Preferred Bidders: To avoid delays, the online auction platform will immediately declare preferred bidders after auction conclusion.
- State Government Accountability: If LoI is delayed beyond 30 days after submission of performance security and upfront payment, the second instalment payable reduces by 5% per month of delay.
Impact and Implementation
The amendments aim to prevent potential squatting by bidders, encourage early operationalisation, and provide a transparent mechanism for monitoring progress. Existing auctioned blocks are also covered, requiring submission of performance security within six months of the rules’ commencement. Remaining milestones will be enforced from the date of commencement.
With these reforms, the Ministry expects smoother execution of mining projects, faster production ramp-up, and increased contribution to India’s mineral output and economic growth.
