Parliament Passes Critical Minerals Mining Amendment Bill
Source:The Hindu ↗
Why It Matters
Securing supply chains for critical minerals (like lithium, nickel, and cobalt) is essential for India's clean energy transition, defense, and high-tech manufacturing. The amendments to the MMDR Act and the establishment of the National Critical Mineral Mission represent structural reforms to reduce import dependencies and are highly relevant for GS-1 (Geography/Resources) and GS-3 (Economy/Infrastructure/S&T).
Summary
The Parliament has passed the Mines and Minerals (Development and Regulation) Amendment Bill, 2025, introducing significant reforms to India's mining sector. The legislation empowers the Union Government to promote mineral trading via dedicated exchanges and allows existing mining leaseholders to extract rare minerals like lithium, cobalt, and nickel without incurring additional royalties. Accompanied by the newly launched ₹34,000 crore National Critical Mineral Mission, the move aims to secure domestic production and supply chains for 24 identified critical minerals crucial for space technology, high-tech manufacturing, and green energy transitions. Additionally, the National Mineral Exploration Trust was renamed the National Mineral Exploration and Development Trust.
Key Points
- The Parliament passed the Mines and Minerals (Development and Regulation) Amendment Bill, which enables leaseholders to mine rare minerals (lithium, cobalt, nickel) without paying additional royalty.
- The Bill empowers the Union Government to establish mineral exchanges and foster the market development for mineral trading.
- The Centre has identified 24 critical and strategic minerals essential for sectors ranging from aerospace and mobile technology to agriculture.
- To boost domestic production, the government launched the National Critical Mineral Mission with a ₹34,000 crore outlay, targeting both onshore and offshore areas.
- The National Mineral Exploration Trust has been restructured and renamed as the National Mineral Exploration and Development Trust.
Important Terms
Mines and Minerals (Development and Regulation) Act, 1957
The principal legislation governing India's mining sector, regulating the grant of mineral concessions and the development of mineral resources across the country.
UPSC context
GS Paper III: Economic Development and Industry. Essential for understanding the legal evolution of resource management and federal-state mining relations.
National Critical Mineral Mission (NCMM)
A ₹34,300 crore central initiative launched in 2025 to secure domestic and foreign supply chains for minerals essential to green energy and high-tech manufacturing.
UPSC context
GS Paper III: Infrastructure and Energy. Tests knowledge of strategic policy frameworks aimed at achieving 'Atmanirbhar Bharat' in energy transition.
Critical Minerals
Strategic minerals (e.g., lithium, cobalt, nickel) vital for modern technology and national security, characterized by high economic importance and significant supply chain risk.
UPSC context
GS Paper I: Distribution of Key Natural Resources. Focuses on the global geopolitics of resources and India's transition to a low-carbon economy.
National Mineral Exploration and Development Trust (NMEDT)
A statutory body (formerly NMET) funded by mining royalties to promote regional exploration; the 2025 reform expanded its mandate to include offshore and overseas projects.
UPSC context
GS Paper III: Industry and Budgeting. Relevant for institutional mechanisms and funding structures that drive scientific resource discovery.
Mineral Exchange
A proposed regulated trading platform designed to facilitate transparent price discovery and the auctioning of mineral ores, concentrates, and mining rights.
UPSC context
GS Paper III: Economic Development. Represents market-based reforms to modernize India's commodity trading and attract private investment in mining.
Prelims Trap
Leaseholders must pay additional, higher royalties to state governments if they extract newly discovered critical minerals.
The 2025 Amendment specifically exempts existing leaseholders from paying *additional* royalties to extract newly discovered critical minerals, aiming to incentivize immediate extraction and production.
Static Concepts Connected
How is regulatory jurisdiction over minerals divided between the Union and State governments?
- State Ownership: State governments own onshore minerals, grant mining leases, and collect royalties under Entry 23 of the State List.
- Union Regulation: The Centre regulates mineral development under Entry 54 of the Union List, framing acts like the MMDR Act.
- Offshore Minerals: Minerals located in territorial waters, the continental shelf, and the Exclusive Economic Zone (EEZ) belong exclusively to the Union Government.
What are Critical Minerals and the National Mineral Exploration Trust (NMET)?
- Critical Minerals: Minerals essential for modern technologies (EVs, defense, space) but characterized by high supply-chain vulnerabilities, extraction complexities, and heavy import dependence.
- NMET Mandate: A statutory, non-profit body established under the MMDR Act, funded by a percentage of mining royalties to accelerate regional mineral exploration (now renamed NMEDT).
Cross-Topic Patterns
MSP, Quad, and Geopolitics
India's domestic critical mineral missions complement its entry into the US-led Minerals Security Partnership (MSP), aiming to counter China's dominance in green-tech and rare earth supply chains.
Upstream supply for PLI schemes
Localizing lithium, cobalt, and nickel extraction directly secures upstream raw materials required for the Advanced Chemistry Cell (ACC) Battery Storage PLI scheme and India's EV transition goals.
Expect a multi-statement question in 2026 linking MMDR amendments, Centre-State mining jurisdictions, and critical mineral supply chains.
Linked PYQs · 5
Linked PYQs · 5
- 2025PrelimsGS1
Consider the following statements : I. India has joined the Minerals Security Partnership as a member. II. India is a resource-rich country in all the 30 critical minerals that it has identified. III. The Parliament in 2023 has amended the Mines and Minerals (Development and Regulation) Act, 1957 empowering the Central Government to exclusively auction mining lease and composite license for certain critical minerals. Which of the statements given above are correct?
- 2022PrelimsGS1
With reference to India, consider the following statements: 1. Monazite is a source of rare earths. 2. Monazite contains thorium. 3. Monazite occurs naturally in the entire Indian coastal sands in India. 4. In India, Government bodies only can process or export monazite. Which of the statements given above are correct?
- 2025PrelimsGS1
Consider the following statements : Statement I: Some rare earth elements are used in the manufacture of flat television screens and computer monitors. Statement II : Some rare earth elements have phosphorescent properties. Which one of the following is correct in respect of the above statements?
- 2025MainsGS3
Mineral resources are fundamental to the country's economy and these are exploited by mining. Why is mining considered an environmental hazard? Explain the remedial measures required to reduce the environmental hazard due to mining.
- 2013MainsGS3
What are the consequences of Illegal mining ? Discuss the Ministry of Environment and Forests' concept of GO AND NO GO zones for coal mining sector.
