The Ministry of Mines of India has amended the Mineral (Auction) Rules, 2015, introducing fixed intermediary timelines for post-auction activities to accelerate the operationalisation of auctioned mineral blocks, according to an official statement released Wednesday.
The amendments establish clear milestones between the issuance of the Letter of Intent (LoI) and the execution of mining leases, with penalties for delays and incentives for early production. The government stated that this move aims to enhance transparency, curb project delays, and prevent bidders from hoarding mining rights without developing them.
Under the revised framework:
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Mining lease (ML) holders must secure mining plan approval within six months, obtain environmental clearance within 18 months, and execute the lease within 12 months thereafter.
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For composite licences (CLs), lessees must execute the licence within 12 months and complete G2-level prospecting within 36 months.
Delays will incur a penalty of up to 1 percent of the bidder’s bank guarantee for each month of delay, while early completion will be rewarded — only 50 percent of the auction premium will be payable if production starts within five years for MLs or within seven years for CLs.
In another key change, performance security must now be submitted within 45 days of the LoI issuance, rather than years later at lease grant. The new rules also apply to already auctioned blocks, with preferred bidders required to comply within six months.
Additionally, the amendment mandates public disclosure of auction results and introduces financial penalties for state governments that delay issuing LoIs beyond 30 days.
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