The Centre has proposed allowing captive mine owners to sell minerals in the open market after meeting the requirement of their linked end-use plants, as part of a broader overhaul of mineral concession rules aimed at easing operational restrictions and encouraging deeper mineral exploration.

Photograph: Nita Bhalla/Reuters

Under the draft Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession (Second Amendment) Rules, 2025, the government has proposed to permit lessees of captive mines to sell surplus mineral production once the needs of the associated end-use plants are met.

A restrictive clause in the existing rules has also been proposed to be omitted, according to the draft notification issued by the Ministry of Mines for public consultation.

In a similar move, the coal ministry had last week proposed removing the 50 per cent ceiling on the sale of coal and lignite produced from captive mines.

The proposed change is part of a wider set of amendments that also seek to facilitate expansion of deep-seated mineral operations and streamline the inclusion of additional minerals in existing mining leases.

Deep-seated minerals are defined as minerals occurring at a depth of more than 200 metres from the surface with poor surface manifestations.

The draft rules provide for allowing holders of mining leases for such minerals to seek a one-time expansion of their lease area into contiguous land.

The expansion would be capped at 10 per cent of the existing leased area, and would be permitted only after prospecting operations establish geological continuity of the mineralised body.

Similar flexibility has been proposed for holders of composite licences for deep-seated minerals, who may seek a one-time expansion of up to 30 per cent of the existing licence area, subject to conditions related to “reasonable level of exploration” and geological continuity.

To address revenue considerations, the draft rules propose additional payments where contiguous areas are included.

In cases where the original lease was granted through auction, the lease holder would be required to pay an additional amount equal to 10 per cent of the auction premium on minerals dispatched from the added area.

For leases granted otherwise than through auction, an additional amount equivalent to royalty would apply.

These payments would be over and above royalty, District Mineral Foundation contributions, and other statutory levies.

Additionally, the government has proposed to tighten norms for minor mineral leases that discover major minerals.

If the extent, quantity or value of a non-minor mineral exceeds 25 per cent of the minor mineral in a lease area, the lease would be terminated and will be put up for auction.

The draft rules will come into force after their publication in the Official Gazette following the consultation process.