Govt proposes cutting timeline for companies to operationalise mines

Government proposes cutting the timeline to operationalise newly auctioned mines to two years, drawing concern from the mining industry over approval delays

The Centre has proposed shortening the timeline for companies to bring newly-auctioned mines into operation from the existing three years to two years.

 

The mines ministry has proposed removing the one-year extension that state governments can currently grant under Section 4A (4) of the Mines and Minerals (Development and Regulation) Act (MMDR Act), effectively reducing the mine operationalisation window.

 

The ministry’s notification, issued on January 7, argues that improvements in technology, infrastructure, automation and digital processes have reduced the time required to make a mine operational. It has invited public comments on the proposal by January 22 as part of the broader consultation for the MMDR (Amendment) Bill, 2026.

 

Section 4A (4) of the MMDR Act says that a mining lease will automatically lapse if production and dispatch do not begin within two years from the date of execution of the lease. The law currently allows state governments to grant an additional one-year extension. The proposed amendment seeks to delete this proviso and eliminate the extension altogether.

 

Commenting on the proposal, a senior executive at industry body Federation of Indian Mineral Industries (FIMI) argued the proposal overlooks the multiple sequential approvals required after obtaining a lease. He told Business Standard the current three-year period is already challenging.

 

“Once you get the mining lease, you still need mine opening permission, consent to establish and consent to operate after environment clearances, land acquisition, logistics and infrastructure development and even permissions for connecting roads passing through forest areas besides local social issues. These activities take a long time,” he said.

 

Legacy issues further complicate matters.

 

“There are also legacy mines where environment and forest clearances were given after execution of the lease, and some of those cases are still in court, which will affect timelines,” the executive said.

 

He also said that companies which recently received extensions under the existing law face uncertainty too.

 

“Once this amendment comes into effect, even those current cases where extensions have been given after the two years’ window may not be considered,” he said.

 

FIMI has urged the government to retain the safeguard. 

 

“We feel it is not in the interest of mineral development to get dispensed with the current proviso. Hence, it is felt that existing proviso should continue and status quo be maintained as per the current Section 4A (4) of the MMDR Act,” the FIMI executive said.

 

The ministry will examine submissions before finalising the amendment proposal.

 

Timeline woes

• Industry body says two-year deadline ignores ground-level clearance delays
• Multiple permissions required even after securing a mining lease
• Legacy mine court cases continue to slow progress
• Recent extensions may become invalid under proposed amendment
• Fimi urges the government to retain existing provision