Law and statutory body

Mineral Concession Rules and MMDR Amendment Act, 2025

GS3 Mining and MineralsPrelims and Mains

In the news since 6 April 2026 · last on 14 April 2026

Why in news
On 10 April 2026 the Ministry of Mines notified the Third Amendment Rules, 2026 to the Mineral Concession Rules. They set a method to publish average sale price (ASP) of haematite iron ore below 45% Fe, including BHQ and BHJ (release dated 14 April 2026).
What it is
The Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession Rules are made under the MMDR Act, 1957. They govern how mineral concessions are granted and operated. The ASP of a mineral grade is used to work out royalty and auction premium payable by miners.
Notification
The Third Amendment Rules, 2026 were notified on 10 April 2026 by the Ministry of Mines.
Run-of-mine
Run-of-mine is raw, unprocessed material from the mineralised zone of a lease area. Royalty is chargeable on lumps and fines after initial screening if processing lowers its economic value.
Parent law
The rules are framed under the Mines and Minerals (Development and Regulation) Act, 1957.
Contiguous area cap
A one-time extension of a mining lease (ML) can add contiguous area of up to 10% of the existing area. For a composite licence (CL) the cap is 30%. This applies to deep-seated minerals.
Payment for added area
For an auctioned ML or CL, the holder pays 10% of the auction premium on minerals dispatched from the added area. For a lease granted without auction, the holder pays an extra amount equal to the royalty.
Associated minerals
The State Government must permit the inclusion of another mineral, including a minor mineral, in a mining lease within 30 days of the application.
Minor mineral leases
Future minor mineral leases (other than sand) can be granted only after exploration up to G3 level. If a major mineral is found, the State auctions the area as a major mineral block.
Captive mine sales
The limit on sale of minerals from captive mines is removed. Sale is allowed after meeting the needs of the linked end-use plant. If the plant runs below full capacity, only the quantity equal to what the plant consumes in a financial year may be sold.
Effective date of Act amendment
The MMDR Amendment Act, 2025 took effect on 1 September 2025.

Don’t confuse with ASP vs MSP: ASP here is the average sale price of a mineral grade used to compute royalty and premium. MSP is the government's minimum support price for crops.

Don’t confuse with Threshold value vs reserve price: Threshold value is the grade limit below which ore counts as waste. Reserve price is the minimum bid price in a mineral block auction.

Don’t confuse with Mining lease vs composite licence: A mining lease allows extraction of a mineral. A composite licence covers both prospecting and mining. The contiguous-area cap is 10% for a mining lease and 30% for a composite licence.

Don’t confuse with Major vs minor minerals: Major minerals are regulated mainly by the Centre under the MMDR Act. Minor minerals, such as sand, are notified by the Centre, but the State Governments make the rules for them and grant the leases.

Laws, judgments and statutory bodies: 30 Prelims questions since 2013 (what the law says, who chairs, legal basis). In Mains, 44 news-triggered questions, most in GS2, asking for provisions and challenges.

No practice question for this one; the card may still help an answer. Why: Lasting topic on mining policy and iron ore beneficiation, already on file; few testable facts. Laws and rules were 23 of 327 news-linked Prelims questions.

Worth revising until Prelims 2027: most news questions come within two years of the event.

Each time it was in the news

  1. 14 April 2026

    On 10 April 2026 the Ministry of Mines notified the Third Amendment Rules, 2026 to the Mineral Concession Rules. They set a method to publish average sale price (ASP) of haematite iron ore below 45% Fe, including BHQ and BHJ (release dated 14 April 2026).

  2. 6 April 2026

    On 6 April 2026 the Ministry of Mines said it had notified the Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession (Second Amendment) Rules, 2026 on 30 March 2026. They set out how contiguous area and associated minerals can be added to mining leases.