Centre plans key mining reform to unlock critical minerals, lift legacy lease limits: Report

Critical Minerals

India is set to amend its mining laws to allow leaseholders of pre-2015 mines to commercially extract critical minerals such as lithium, cobalt, and rare earths, Mint reported.

Currently, mining leases granted before auctions became mandatory in 2015 restrict miners to extracting only the minerals originally specified in their lease.

The proposed amendment to the Mines and Minerals (Development and Regulation) Act (MMDR Act), expected in the Monsoon Session of Parliament, would allow over 2,500 legacy mines to tap into newly discovered strategic minerals through a deemed approval process, without fresh auctions or added premiums.

“This will allow non-auctioned operational mines to extract even critical minerals,” Mint quoted an official as saying.

The move aims to revive idle mines and boost India's access to minerals crucial for clean energy, electronics, automobiles, and defence. As of March 2023, India had over 3,000 such leases (excluding coal and atomic minerals), with about half lying unused.

India’s push comes amid growing global competition for critical minerals and concerns over China’s dominance in rare earth supplies. In January, the government launched the National Critical Mineral Mission. Since the 2023 MMDR amendment, 24 blocks of critical minerals have been auctioned. Experts see the reform as a “low-hanging fruit” to meet industrial demand faster.

“Prohibition to mine a critical mineral within an existing lease ensures it stays underground or goes as waste,” said Rajnish Gupta of EY India. The Federation of Indian Mineral Industries (FIMI) echoed this view. “Extraction from mining waste could be brought to production quickly,” said B.K. Bhatia, FIMI’s Director General.

Alongside domestic reforms, India is also scouting overseas mining assets, using funds from the National Mineral Exploration Trust.

At the BRICS Summit in Rio, Prime Minister Narendra Modi stressed the need for “secure and reliable” critical mineral supply chains, warning against their misuse as geopolitical leverage.

India is also part of the Quad Critical Minerals Initiative with the US, Australia, and Japan.