The Centre has proposed reducing the time allowed for companies to operationalise newly auctioned mines from three years to two years, a move aimed at speeding up mineral production and investment.

The Ministry of Mines has suggested removing the one-year extension that state governments can currently grant under Section 4A(4) of the Mines and Minerals (Development and Regulation) Act. This would effectively shorten the window available to miners to begin production and dispatch from the date of lease execution.

In a notification issued on January 7, the ministry said advances in technology, infrastructure, automation and digital processes have significantly reduced the time required to make mines operational. It has invited public comments on the proposal by January 22 as part of the wider consultation process for the MMDR (Amendment) Bill, 2026.

Under the existing law, a mining lease automatically lapses if production and dispatch do not commence within two years of execution, although state governments are permitted to grant a one-year extension. The proposed amendment seeks to delete this provision, eliminating the possibility of any extension.

Industry representatives have raised concerns over the proposal. A senior executive at the Federation of Indian Mineral Industries said the move underestimates the time required to secure multiple sequential approvals even after a lease is granted. He said the current three-year period is already difficult to adhere to.

“After securing a mining lease, companies still need mine opening permission, consent to establish and consent to operate following environmental clearances, along with land acquisition, logistics and infrastructure development. Permissions for approach roads through forest areas and resolution of local social issues also take considerable time,” he said.

Legacy issues further complicate the process, particularly in cases where environmental and forest clearances were granted after lease execution and are still under litigation. Such disputes, he said, could significantly disrupt timelines.

The executive also warned that companies which have already received extensions under the existing framework could face uncertainty if the amendment is implemented, as even those cases may no longer be recognised.

FIMI has urged the government to retain the current safeguard, arguing that removing the extension provision would not be in the interest of mineral development. The ministry has said it will examine stakeholder submissions before finalising the amendment proposal.