Mines Ministry amends rules to include contiguous areas in leases

New rules allow inclusion of contiguous areas and associated minerals in leases, aiming to boost exploration, improve efficiency, and enhance critical mineral production

The Ministry of Mines announced it has notified the Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession (Second Amendment) Rules, 2026 for inclusion of contiguous area in the mining lease and composite licence of deep-seated minerals and inclusion of associated minerals in the mining leases of major and minor minerals.

 

The ministry said this change is pursuant to amendments to the Mines and Minerals (Development and Regulation) Act, 1957, effective September 2025, aimed at increasing exploration and production of critical minerals. "The reforms ushered in by the amendment give impetus to the mining sector to increase the supply of minerals for industries, leading to strengthening Atmanirbhar Bharat," the ministry said in a statement.

 

The amended rules provide provisions for processing the application made by the holder of a mining lease (ML) or composite licence (CL) of deep-seated minerals for a one-time extension of the area to include a contiguous area. In the case of ML, the contiguous area shall not exceed 10 per cent, and in the case of CL, the contiguous area shall not exceed 30 per cent of the existing area under the lease or licence.

 

"If a contiguous area is added to an auctioned ML or CL, the holder must pay 10 per cent of the auction premium on minerals dispatched from that added area. If the lease was granted without auction, the holder must pay an extra amount equal to the royalty on minerals dispatched from the added area," the ministry said.

 

Allowing inclusion of contiguous areas is expected to promote optimal mining of deep-seated minerals, which are locked up in contiguous areas and may not be economically viable to be extracted under a separate lease or licence.

 

The rules also provide the manner of inclusion of any other mineral, including a minor mineral, in a mining lease and mandate state governments to permit such inclusion within 30 days of the application.

 

No additional amount is applicable on inclusion of critical and strategic minerals or deep-seated minerals specified in the Seventh Schedule to the MMDR Act to incentivise production of these minerals, which are found in small quantities and are difficult to mine and process.