Ministry of Mines Introduces Intermediate Timelines to Fast-track Operationalisation of Auctioned Mineral Blocks

Ministry of Mines Introduces Intermediate Timelines to Fast-track Operationalisation of Auctioned Mineral Blocks

The Ministry of Mines has notified amendment to the Mineral (Auction) Rules, 2015, introducing intermediary timelines for various activities to be completed after issue of Letter of Intent (LoI) till execution of mining lease. Since commencement of auction regime in 2015, a total of 585 major mineral blocks has been successfully auctioned including 34 critical mineral blocks auctioned by the Central government. Initially the pace of auction was slow, however, for past three years, on average over 100 minerals blocks are being successfully auctioned. During the current year, in first seven months only, 112 mineral blocks have already been successfully auctioned.

Along with increase in auctions of mineral blocks, operationalization of the auctioned mines needs to be speeded up for increasing mineral production. In this respect, the Ministry of mines has taken several steps including regular meetings with successful bidders, State governments and other stakeholders. The Ministry has also set up a PMU to monitor operationalisation of mines. As the latest step in its endeavour to fast-track operationalization, the Ministry of Mines has notified amendment to the Mineral (Auction) Rules, 2015 on 17.10.2025 introducing intermediary timelines for various activities to be completed after issue of Letter of Intent till execution of mining lease.

Prior to the amendment, the rules prescribed only a broad timeframe of three years (extendable by an additional two years) for executing the mining lease from the date of issuance of LoI. Failure to meet this milestone resulted in annulment of the block’s auction. However, there was no mechanism to monitor progress across the various stages between the issuance of the LoI and the execution of the lease. Thus, there were limited opportunities for mid-course corrective action.

The amendment in Rules have introduced intermediate timelines which need to be adhered to, otherwise penalties have been prescribed for delay. Penalties for delays in meeting these interim milestones have been kept reasonable. Moreover, if the final milestone is achieved within the stipulated timeframe, any penalties incurred for earlier delays will be adjusted against the auction premium payable. The overarching objective is to ensure timely operationalisation of the mine, rather than to impose punitive measures. The amendment also prescribes incentives for early operationalisation of mines. The amendment is intended to deter potential squatting by bidders.

Important highlights of the Rule amendment are as follows: –

The above amendments have been brought in after due consultation with all relevant stakeholders.