Mines Ministry amends auction rules to fast-track mine operationalisation

Government revises mineral auction rules to ease constraints, allow exclusions, and extend timelines, aiming to accelerate mine operationalisation and boost sector efficiency

The Ministry of Mines announced that it has notified the Mineral (Auction) Second Amendment Rules, 2026, for faster operationalisation of mines, as part of a series of steps to enhance efficiency, transparency, and ease of doing business in the mining sector.

 

The rules were last amended in October 2025 to introduce intermediary timelines for various activities to be completed after the issue of the letter of intent (LoI) till execution of the mining lease.

 

The latest amendment allows the exclusion of portions of mineral blocks where mining is not feasible due to constraints, where such areas contain less than 25 per cent of the total estimated quantity of mineral resources in the block.

   

"This will pave the way for operationalisation of mines which get stuck due to various issues related to a small portion of the block area," the ministry said. It added that the amended rules provide an additional period of two years for execution of the mining lease beyond the initial three years from LoI for blocks involving forest land.

 

The amended rules also provide that the second instalment of upfront payment is required to be deposited within one year from the date of issuance of LoI. The rules have a provision for the refund of upfront payment and performance security in cases where auctions are annulled as mining has become impossible in the block due to reasons not attributable to the preferred bidder.

 

"Exemption from auction premium has been introduced for critical and strategic minerals (excluding graphite, phosphate, and potash), where the value of estimated resources of all such minerals is less than 10 per cent of the total estimated mineral resources of the block," the ministry said.

 

The amendments are aimed at accelerating mineral development, facilitating timely operationalisation of mines, encouraging private sector participation, and strengthening the regulatory framework governing mineral auctions.