Lok Sabha Question No. 3068 (UNSTARRED), answered on 2026-03-11
Subject: Impact of the Amendments of MMDR Act and Mineral (Auction) Rules
Ministry: MINES
Asked by: Shri Narayan Tatu Rane

## GOVERNMENT OF INDIA MINISTRY OF MINES

## LOK SABHA UNSTARRED QUESTION NO. †3068

ANSWERED ON 11.03.2026

## IMPACT OF THE AMENDMENTS OF MMDR ACT AND MINERAL (AUCTION) RULES

†3068. SHRI NARAYAN TATU RANE:

Will the Minister of MINES be pleased to state:

- (a) the impact of the amendments made in the Mines and Minerals (Development and Regulation), Act (MMDR) and the Mineral (Auction) Rules on speeding up the auction and commissioning of mineral blocks; (b)  the  effectiveness  of  the  newly  introduced  intermediary  timelines,  penalties  and incentives in reducing delays caused by bidders or States; (c) the details of measures taken to ensure balanced participation of the new States joining the auction regime; and (d) the details of the steps proposed to be taken by the Government to further expedite the operational commissioning of auctioned mineral blocks to increase the domestic
- mineral production?

## ANSWER

## THE MINISTER OF STATE FOR COAL AND MINES (SHRI SATISH CHANDRA DUBEY)

(a): The Mines and Minerals (Development and Regulation) (MMDR) Act, 1957 was amended in 2015 to introduce auction of mineral concessions. Further amendments in 2021 facilitated faster auction and operationalization of mineral blocks by removing end-use  restrictions,  permitting  sale  of  minerals  from  captive  mines,  providing  for automatic  transfer  of  statutory  rights  and  clearances  to  new  lessees  and  allowing transfer of mineral concessions. The auction framework was simplified by permitting auction of Composite Licence blocks at G4 level and Mining Lease blocks for surficial minerals  at  G3  level.  Under  Sections  10B  and  11  of  the  MMDR  Act,  1957,  and pursuant  to  the  MMDR  Amendment  Act,  2023,  the  Central  Government  has  been empowered to conduct auctions, including for critical and strategic mineral blocks. Till date, 46 critical mineral blocks have been auctioned by the Central Government.

Since the introduction of the auction regime in 2015, 108 blocks were auctioned up to FY 2020-21. Following the mining sector reforms in 2021, a total of 552 blocks have been auctioned from FY 2021-22 to FY 2025-26 (till date). Further, due to various reforms, the pace of operationalization has also increased. In FY 2025-26 (till date), 26 blocks have been operationalized.

(b): Ministry of Mines has introduced intermediary timelines, notified on 17.10.2025, to ensure faster operationalization of mines. The Rules provide for appropriation of 1% of the performance security for delay (attributable to the bidder) of each month or a part  of  month  beyond  the  timelines.  The  Rules  also  provide  for  adjustment  of  the appropriated  amount,  if  any,  against  the  auction  premium  payable,  if  the  final milestone is achieved within the stipulated overall timeframe. Further, the Rules also provide for reduction in the amount of second instalment of the upfront payment by 5% for the delay of each month or a part of month by the State Government in issuing the letter of intent to the preferred bidder beyond the stipulated time.

Further, an incentive has been provided for early commencement of production from  the  auctioned  mines.  The  lessee  is  required  to  pay  only  50%  of  the  auction premium for the mineral produced, within five years from the date of issue of letter of intent for grant of mining lease or within seven years from the date of issue of letter of intent for grant of composite licence.

(c):  States  put  up  blocks  for  auction  depending  on  resources  explored  and  blocks carved out. Ministry of Mines, through regular review meetings with State Governments, encourages States to auction more mineral blocks. In addition, National Mineral Exploration and Development Trust (NMEDT) provides State Governments financial  incentives of ₹20 lakh for each successful auction of a mineral block and reimbursement of 50% of the amount paid to the Transaction Advisor, subject to a ceiling of ₹5 lakh per block, for those blocks that were put up for auction but could not be auctioned.

(d): Ministry of Mines has taken several measures to fast-track operationalization of auctioned  mineral  blocks  and  increase  domestic  mineral  production.  Important measures  include  regular  high-level  review  meetings,  introduction  of  intermediary timelines under the Mineral (Auction) Rules, financial incentives through the Scheme of  Special  Assistance  to  States  for  Capital  Investment  (SASCI)  2025-26,  and monitoring through a dedicated Project Management Unit and Mining Dashboard.

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