**Executive Summary**
This document details the Indian government's response to questions regarding the impact of amendments to the Mines and Minerals (Development and Regulation) Act (MMDRA) and Mineral Auction Rules, particularly in Odisha, as of February 4, 2026. It outlines measures taken to accelerate mineral block auctions and operationalization, reduce delays, ensure balanced state participation, and enhance domestic mineral production. Key actions involve legislative amendments, rule changes, financial incentives, and infrastructure improvements.
**Key Points / Main Content**
* **Amendments to MMDR Act & Mineral Auction Rules**
* 2015 Amendments: Introduced auctions for granting mineral concessions.
* 2021 Amendments: Facilitated faster auction and operationalization of mineral blocks by removing end-use restrictions, permitting sales from captive mines, and automatic transfer of statutory clearances.
* 2023 Amendments: Empowered the Central Government to conduct auctions, including for critical and strategic mineral blocks. 46 critical mineral blocks have been auctioned by the Central Government to date.
* Framework simplification: Permitting auction of Composite License blocks at G4 level and Mining Lease blocks for surficial minerals at G3 level.
* **Auction Progress & Operationalization**
* Since 2015: 108 blocks auctioned up to FY 2020-21.
* From FY 2021-22 to FY 2025-26: 498 blocks auctioned.
* Odisha: 60 mineral blocks auctioned since 2015.
* Operationalization: 56 blocks operationalized up to FY 2024-25, 26 in FY 2025-26.
* Odisha operationalization: 30 mineral blocks, 4 in FY 2025-26.
* **Intermediary Timelines, Penalties, and Incentives**
* Mineral (Auction) Rules amendment: Introduced intermediary timelines (effective from 17.10.2025) to fast-track operationalization of auctioned blocks.
* Performance security: Appropriation of 1% for delay (attributable to bidder) per month, adjustable against auction premium if milestone achieved.
* Upfront payment reduction: 5% reduction in the second installment for each month of State Government delay in issuing the letter of intent.
* Early commencement incentive: Lessee pays only 50% of the auction premium for minerals produced within five/seven years from the letter of intent for grant of mining lease or composite license.
* **Balanced State Participation**
* States responsible for auctioning depending on exploration.
* Ministry of Mines encourages States to auction more blocks through review meetings.
* Financial incentives: ₹20 lakh for successful auctions, 50% reimbursement for Transaction Advisor fees (ceiling of ₹5 lakh).
* **Steps to Expedite Operationalization and Increase Production**
* Regular high-level review meetings
* Introduction of intermediary timelines under the Mineral (Auction) Rules
* Financial incentives through the Scheme of Special Assistance to States for Capital Investment (SASCI) 2025-26
* Monitoring through a dedicated Project Management Unit and Mining Dashboard.
* **Mineral Transportation**
* Miners utilize existing rail-road infrastructure.
* Ministry of Railways increasing capacity and creating dedicated corridors as needed.
**Impact Analysis**
**States (including Odisha)**
* **Impact**: Affected by the MMDR Act amendments and Mineral Auction Rules regarding auctioning and operationalization of mineral blocks.
* **Action Required**: Expedite processes for auctioning and operationalizing mineral blocks, implement timelines under the Mineral (Auction) Rules, and participate in review meetings with the Ministry of Mines.
**Bidders/Lessees**
* **Impact**: Subject to performance security appropriations for delays, eligible for adjustments to auction premium, and entitled to reduced upfront payments.
* **Action Required**: Adhere to stipulated timelines for operationalization, aim for early commencement of production to avail incentives, and manage delays to minimize penalties.
**Ministry of Mines**
* **Impact**: Responsible for monitoring and implementing amendments to the MMDR Act and Mineral Auction Rules.
* **Action Required**: Conduct regular review meetings with states, provide financial incentives, and monitor progress through the Project Management Unit and Mining Dashboard.
**Ministry of Railways**
* **Impact**: Plays a key role in facilitating mineral transportation through the development of rail infrastructure.
* **Action Required**: Increase capacity of high traffic density rail routes and create dedicated corridors as needed for efficient mineral transportation.
Key Entities Referenced
Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act): Governs the regulation of mines and minerals in India; amendments discussed impact mineral auctions and operations.
Mineral (Auction) Rules, 2015: Rules framed under the MMDR Act for auctioning mineral concessions; amendments introduce timelines and incentives for operationalization.
Ministry of Mines: Union ministry responsible for policies related to exploration, mining, and metallurgy of non-fuel and non-atomic minerals.
Odisha: Indian state specifically mentioned as an area of focus regarding the impact of amendments and auction processes.
National Mineral Exploration and Development Trust (NMEDT): Provides financial incentives to State Governments for successful mineral block auctions.
GOVERNMENT OF INDIA
MINISTRY OF MINES
LOK SABHA
UNSTARRED QUESTION NO. †705
ANSWERED ON 04.02.2026
IMPACT OF THE AMENDMENTS MADE IN MMDR ACT
†705. DR. RAJESH MISHRA:
SHRI KRIPANATH MALLAH:
SHRI MANISH JAISWAL:
SHRI DARSHAN SINGH CHOUDHARY:
SHRI VISHNU DAYAL RAM:
SHRI ASHOK KUMAR RAWAT:
SHRI BALABHADRA MAJHI:
SMT. VIJAYLAKSHMI DEVI:
SHRI MANOJ TIWARI:
SHRI KHAGEN MURMU:
SHRI RODMAL NAGAR:
SHRI NABA CHARAN MAJHI:
Will the Minister of MINES be pleased to state:
(a) the details of the impact of the amendments made in the Mines and Minerals
(Development and Regulation) Act (MMDRA) and Mineral Auction Rules on
accelerating the auction and commencement of operations of mineral blocks in the
country, particularly in Odisha;
(b) the effectiveness of the newly introduced intermediaries timelines, penalties and
incentives in reducing delays caused by bidders or States, with specific outcomes in
Odisha;
(c) the measures taken by the Government to ensure balanced participation of newly
entering States in the auction process and the details of participation of mineral block
in Odisha, particularly in the Nabarangpur region;
(d) the details of proposed steps to further expedite the commencement of operations
of auctioned mineral blocks in order to increase domestic mineral production and the
likely benefits particularly for Odisha including Nabarangpur district;
(e) whether there is any proposal to create dedicated corridors for mineral
transportation along with mineral auctions, if so, the details thereof; and
(f) whether there is any proposal for a dedicated corridor at Singrauli?ANSWER
THE MINISTER OF COAL AND MINES
(SHRI G. KISHAN REDDY)
(a): The Mines and Minerals (Development and Regulation), Act, 1957 (MMDR Act)
was amended in 2015 to introduce auction for grant of mineral concessions. Further
amendments in 2021 facilitated faster auction and operationalisation of mineral blocks
by removing end-use restrictions, permitting sale of minerals from captive mines,
providing for automatic transfer of statutory clearances to the successful bidder
selected though auction and allowing transfer of mineral concessions. The auction
framework was simplified by permitting auction of Composite Licence blocks at G4
level and Mining Lease blocks for surficial minerals at G3 level. Pursuant to the MMDR
Amendment Act, 2023, the Central Government has been empowered to conduct
auctions, including for critical and strategic mineral blocks. Till date, 46 critical mineral
blocks have been auctioned by the Central Government. These reforms apply to all
States including Odisha.
Since the introduction of the auction regime in 2015, 108 blocks were auctioned up to
FY 2020-21. Following the mining sector reforms in 2021, a total of 498 blocks have
been auctioned from FY 2021-22 to FY 2025-26 (till date). In respect of Odisha, a total
of 60 mineral blocks have been auctioned since 2015. Further, due to various reforms,
the pace of operationalization has also increased. 56 blocks were operationalized up
to FY 2024-25, while in FY 2025-26 (till date), 26 blocks have already been
operationalized. In respect of Odisha, a total of 30 mineral blocks have been
operationalized, of which 4 in FY 2025-26 (till date).
(b): Ministry of Mines has amended the Mineral (Auction) Rules, 2015 with effect from
17.10.2025 whereby intermediary timelines have been introduced in the Rules in order
to fast-track the operationalization of auctioned mineral blocks. These Rules apply to
all States including Odisha.
The Rules provide for appropriation of 1% of the performance security for delay
(attributable to the bidder) of each month or a part of month beyond the above
timelines. The Rules also provide for adjustment of the appropriated amount, if any,
against the auction premium payable, if the final milestone is achieved within the
stipulated overall timeframe. Further, the Rules also provide for reduction in the
amount of second installment of the upfront payment by 5% for the delay of each
month or a part of month by the State Government in issuing the letter of intent to the
preferred bidder beyond the stipulated time.
Further, an incentive has been provided for early commencement of production from
the auctioned mines. The lessee is required to pay only 50% of the auction premium
for the mineral produced, within five years from the date of issue of letter of intent forgrant of mining lease or within seven years from the date of issue of letter of intent for
grant of composite licence.
(c): States put up blocks for auction depending on resources explored and blocks
carved out. Ministry of Mines, through regular review meetings with State
Governments, encourages States to auction more mineral blocks. In addition, under
the National Mineral Exploration and Development Trust (NMEDT), State
Governments are provided financial incentives of ₹20 lakh for each successful auction
of a mineral block and reimbursement of 50% of the amount paid to the Transaction
Advisor, subject to a ceiling of ₹5 lakh per block, for blocks put up for auction but could
not be auctioned. These measures apply to all States including Odisha.
(d): Ministry of Mines has taken several measures to fast-track operationalisation of
auctioned mineral blocks and increase domestic mineral production. Important
measures include regular high-level review meetings, introduction of intermediary
timelines under the Mineral (Auction) Rules, financial incentives through the Scheme
of Special Assistance to States for Capital Investment (SASCI) 2025-26, and
monitoring through a dedicated Project Management Unit and Mining Dashboard.
These measures apply to all States including Odisha.
(e) & (f): After mineral auction and mine operationalization, miners utilize the existing
rail-road infrastructure in the country for transportation of minerals. Ministry of
Railways increases capacity of high traffic density rail routes as well as creates
dedicated corridors as per need, for easy transportation of commodities spanning all
economic sectors, including mining.
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