India Passes New Mining Bill to Boost Flexibility, Revenue, and Tax Certainty for Mining Companies

To support the exploration of critical and strategic minerals, the Indian Parliament passed the Indian Mines and Minerals (Development and Regulation) Amendment Bill, 2026. The bill aims to give mining companies increased flexibility in managing resources, enhance the commercial viability of captive mines, and increase certainty around mining-related taxation.

This bill allows mining companies to add additional minerals to an existing lease with state government approval and thus allowing them extraction of multiple commercially viable minerals from the same area, eliminating the necessity for separate concessions.

Parliament approved the legislation on 13 August. The Bill will take effect once it receives the President’s assent.

The amendment exempts mining companies from additional payments when adding specified critical and crucial minerals, such as lithium, graphite, nickel, cobalt, gold, and silver.

For other minerals, companies must generally pay the applicable royalty. Auctioned mines will also incur the relevant auction premium.

Experts believe this change will improve resource utilisation and reduce regulatory complexity for deposits containing multiple commercially recoverable minerals.

The amendment also seeks to remove the 50% sales ceiling for captive mines, which would be a significant change for industrial companies with captive mineral assets.

Previously, captive mine operators could sell only a portion of production after meeting their end-use plant requirements. The amendment removes this limit and allows companies to commercialise surplus production more freely.

This change could create new revenue streams for steel, aluminium, power, cement, and other mineral-consuming companies with captive mines. It also enables better alignment of production with raw material needs and market situations.

The legislation allows state governments to permit the sale of mineral dumps within leased areas, enabling miners to recover value from previously accumulated material.

The amendment also affects the taxation environment for mining companies.

The new law restricts state governments from imposing new taxes, cesses, or other levies on mineral rights and mineral-bearing land unless they meet the conditions set by the central government.

The government argues that inconsistent state levies, multiple taxes, and retrospective demands have created uncertainty for miners and investors.

According to Reuters, the legislation also invalidates unpaid or uncollected levies imposed by states before the law takes effect.

The Bill expands the National Mineral Exploration Trust’s mandate to include mineral and mine development, and renames it the National Mineral Exploration and Development Trust.