Ministry of Mines Fast-Tracks Mineral Auction Operationalisation with New Timelines

The Ministry of Mines has amended the Mineral (Auction) Rules, 2015, to ensure faster operationalisation of auctioned mineral blocks. With specific milestones and time-based incentives and penalties, this reform aims to boost mining production and deter delays by bidders.

New Amendment Sets Clear Milestones for Mining Operationalisation

As of October 17, 2025, new intermediary timelines now cater to mining lease (ML) and composite licence (CL) auctions. For MLs, 3 clear stages must be achieved: mining plan approval within 6 months, environmental clearance within 18 months, and lease execution within 12 months. For CLs, 2 additional stages are added: execution of CL in 12 months and G2-level prospecting within 36 months. Completing these within 3 years for MLs and 7 years for CLs avoids penalties.

Incentives Introduced for Early Production

To encourage early mineral extraction, only 50% of the auction premium is payable on minerals dispatched before 5 years for MLs and 7 years for CLs from the Letter of Intent (LoI) date. This promotes quicker mine development and production, in turn benefiting mineral supply chains.

Penalty Mechanism for Delays

Delays in milestone achievements attract bank guarantee deductions at 1% per month. However, if final targets are met on time, penalties are adjusted against future premiums, making the rule facilitative rather than punitive.

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Immediate Declaration of Preferred Bidder and Timely LoI Issuance

To bring transparency and speed, preferred bidders will now be declared immediately post-auction via an electronic platform. Also, the LoI must be issued within 30 days of the upfront payment and performance security submission. Delays will result in 5% reduction per month in the 2nd instalment of the upfront payment.

Applicability on Previously Auctioned Blocks

The rule changes also apply to previously auctioned mineral blocks. Bidders must submit performance security within 6 months and adhere to pending milestones, with the countdown beginning from the rule's commencement.

Conclusion

This policy overhaul by the Ministry of Mines introduces structured enforcement with incentives and penalties, aiming to prevent delays and accelerate the operational readiness of India's mineral resources.

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