Govt Amends Mining Law to Secure Critical Minerals Supply

The Centre is poised to propose significant changes to the Mines and Minerals (Development and Regulation) Act (MMDR) in Parliament this week, which will allow for state-funded purchases of mineral assets and commodities such as lithium, copper, cobalt, and rare earth elements. With the global supply of critical minerals dwindling and geological circumstances not improving, there is a strong need for state involvement to ensure long-term access to mineral ores amid a host of geopolitical risk factors.

The acquisition of offshore assets and commodities will be funded through the National Mineral Exploration Trust (NMET), which currently has a corpus of more than Rs. 6,000 crore collected from holders of mining leases. The NMET will likely have its name changed to include "development", and the scope of the Fund will be expanded to include exploration and acquisition of overseas mineral assets and other related activities.

The Bill also provides substantial domestic mining reforms, including allowing state-sanctioned disposal of low-grade ("low value") mineral dumps from captive mines, streamlining of newly discovered minerals to an existing lease, with limitations capped at 10% of the leased land area, and allowing one-time expansion to target hard reach minerals deep underground. Many of the above-noted reforms have the potential to limit waste on-site, off-site, and monetarily, given that more than half of mined minerals from some captive mines are unusable.

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The need for urgency is evidenced by China's continued global dominance of the rare earths supply chain, with China controlling more than 60% of total production, and just recently blocking exports to Indian electric vehicle (EV) manufacturers - this eviction cut production of electric two-wheeled vehicles in India in half.

The amendments in this Bill support the National Critical Mineral Mission, started in 2025, designed to enhance domestic exploration, establish foreign supply, enable value chains, and support India's efforts to decarbonize and transition to clean energy.