The Ministry of Mines has notified the amendments to the Mineral (Auction) Rules, 2015 and  introduced intermediary timelines between the issuance of the letter of intent and execution of mining leases to accelerate the operationalisation of auctioned mineral blocks.
The revised rules aim to curb delays in mine development by prescribing milestone-based timelines and enabling mid-course corrective actions. For mining leases (ML), key milestones include mining plan approval within 6 months, environment clearance within 18 months, and lease execution within 12 months. For composite licences (CL), additional milestones include execution of CL within 12 months and completion of G2-level prospecting within 36 months. Delays in meeting these timelines will attract penalties through proportional appropriation of the bidder’s bank guarantee at 1 per cent per month. However, if the final lease execution is completed on time, earlier penalties may be adjusted against the auction premium. Incentives for early production have also been introduced, only 50 per cent of the auction premium is payable on mineral dispatches within 5 years for ML or 7 years for CL from letter of intent issuance. The amendments also mandate earlier submission of performance security within 45 days of LoI for both new and already auctioned blocks. LoI issuance by the state must now occur within 30 days of receiving the first upfront payment and performance security; delays will trigger a 5 per cent reduction per month in the second instalment of the upfront payment. The provisions are applicable retrospectively to previously auctioned blocks, with remaining milestones recalculated from the amendment’s commencement date.