India’s next big mining move could change global supply chains

India is moving to secure a steady and upgraded supply of critical minerals — including lithium, copper, cobalt and rare earth elements — that are vital for nuclear energy, renewable power, space research, defence production, telecommunications and advanced electronics. At present, China dominates the global supply chain for these minerals.

The government plans to table amendments to the Mines and Minerals (Development and Regulation) Act (MMDR Act) in Parliament this week. The key change involved is allowing state-backed funding for acquiring strategic mineral assets overseas.

A senior official confirmed that all internal approvals are complete and the Bill could be introduced as early as Monday. The proposal will unlock the National Mineral Exploration Trust (NMET) — which currently holds over ₹6,000 crore — for overseas acquisitions. Mining lease holders contribute 2% of their royalty to NMET, which was set up in 2015 to accelerate domestic mineral exploration.

From exploration to acquisition

Since its inception, NMET has approved projects worth ₹4,000 crore. Its annual collection is about ₹1,000 crore and is expected to rise as more mines become operational. Under the amendments, NMET’s mandate will expand from exploration to global acquisition and development of critical mineral assets and its name will be revised to reflect this broader role.

Officials say the legislative push will directly address India's vulnerability in securing raw materials for critical mineral supply chains. The MMDR Act was last amended in 2023 and the new round of changes has been anticipated since January.

Unlocking mineral stockpiles

The government is also weighing regulatory changes to allow captive mines to sell accumulated low-grade or plant-incompatible mineral stockpiles through a one-time payment mechanism. State officials report that more than 50% of minerals extracted from such mines are unsuitable for captive end-use. Current rules prohibit their sale, but the proposed framework would permit states to authorise disposal within leased areas after collecting additional fees.

Expanding mining leases

The amendments could further simplify the process of adding newly identified minerals or adjoining areas to existing leases. Deep-seated mineral leaseholders could apply once to add up to 10% of their current lease area. For auctioned mines, output from these extensions would attract a 10% surcharge on the auction premium; for non-auctioned mines, royalty rates would be doubled.

India’s mineral production — excluding atomic minerals, minor minerals and hydrocarbons — rose to ₹1.40 lakh crore in 2023-24 from ₹1.24 lakh crore the previous year, official data shows.