Central Govet Notifies New Mining Rules to Speed Up Mine Operations and Improve Transparency

New Delhi : The Ministry of Mines has introduced new rules called the Mineral (Auction) Second Amendment Rules, 2026 on March 30, 2026. The aim is to speed up the process of starting mining operations and improve transparency and ease of doing business in the sector.

Earlier, the Mineral (Auction) Rules, 2015 were updated in October 2025 to set clear timelines for steps between selecting a bidder and starting mining work. If the selected bidder delays the process, a penalty of 1% of the performance security is charged for every month of delay. At the same time, incentives were introduced to encourage faster start of mining projects.

The rules also ensure accountability for State Governments. If a state delays issuing the Letter of Intent (LoI) to the selected bidder beyond 30 days, the amount payable by the bidder in the next instalment is reduced by 5% for each month of delay. This encourages quicker approvals.

In addition, the Ministry has taken several steps to speed up mine operations. These include regular meetings with States, setting up a monitoring unit, and launching a digital dashboard to track progress and identify delays. Mines are also being auctioned with pre-approved clearances to save time.

These latest changes have been made after discussions with Central Ministries, State Governments, industry groups, and other stakeholders to further improve the mining sector.

Key Highlights of the Mineral (Auction) Second Amendment Rules, 2026 are as follows:—

• Allowed exclusion of non-feasible portion of mining block: The amendment rules allows exclusion of portions of mineral blocks where mining is not feasible due to constraints such as forest, wildlife corridors, rivers, nallah, habitation or infrastructure, where such areas contain less than 25% of the total estimated quantity of mineral resources in the block. This will pave way for operationalisation of mines which get stuck due to various issues related to a small portion of the block area.
• Introduction of Unified Mining Portal: A unified mining portal will be implemented to streamline various processes such as identification and preparation of blocks for auction, obtaining of clearances, monitoring of operationalisation, etc. The portal will also facilitate automatic issuance of LoI upon the receipt of 1^st instalment of upfront payment and/or performance security, to reduce delays and improve the transparency.
• Reducing the provision of additional period for execution of Mining Lease (ML) in case of blocks does not involve forest area: The rules have been amended to provide that the additional period of two years for execution of ML beyond the initial 3 years from LoI will be allowed for blocks involving forest land only. In case the block does not involve forest land, no additional period beyond 3 years will be allowed. This amendment is made to aim the faster operationalisation of auctioned mineral blocks. The amendment will be applicable on the blocks auctioned after 30^th March 2026.
• Upfront payment timeline rationalized: The amended rule provides that the 2^nd instalment of upfront payment is required to be deposited within one year from the date of issuance of LoI. This amendment will be applicable on the blocks auctioned after 30th March 2026.
• Relief in case of annulment: Provision has been made in the rules for 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.
• Greater participation of exploration agencies: Through these amendments, notified Private Exploration Agencies (NPEAs) are now permitted to participate in auctions of all types of mineral blocks explored by them. Earlier their participation was restricted to the blocks of critical & strategic and deep-seated minerals only.
• Incentive for critical and strategic minerals: Exemption from auction premium has been introduced for critical and strategic minerals (excluding Graphite, Phosphate, and Potash), where their value of estimated resources of all such minerals is less than 10% of the total estimated mineral resources of the block.

These amendments are aimed to accelerate mineral development, facilitate timely operationalization of mines, encourage private sector participation, and strengthen the regulatory framework governing mineral auctions in India.