Introduction
The Mines and Minerals (Development and Regulation) Amendment Bill, 2025 (“the Bill”) was passed by both Houses of Parliament to amend the Mines and Minerals (Development and Regulation) Act, 1957 (“the Act”) and received the President’s assent on 21 August 2025 and commenced on 1 September 2025.
The legal framework governing mining and environmental regulation in India has recently undergone significant developments. In Vanashakti v. Union of India (May 2025), the Supreme Court (“SC”) held that ex post facto environmental clearances were incompatible with the Environmental Impact Assessment Notification, 2006, observing that prior environmental clearance is a mandatory prerequisite for projects with potential environmental impact. However, in Confederation of Real Estate Developers of India v Vanashakti (November 2025), the Court reviewed and recalled that position, upholding the executive framework permitting the grant of environmental clearances after the commencement or expansion of projects in specified circumstances.
One important change which has been made in the Act was the inclusion of Section 6A, which has permitted the extension of the area under existing licences and leases to include contiguous and deep-seated minerals without a fresh allocation. This amendment marks a significant shift from the previous process, which required a new allocation through auction. This raises a fundamental question: Can the government expand mining leases without a fresh auction?
This blog seeks to provide an analytical and critical analysis of this shift by examining the constitutional and legal implications of this process. It explores the rationale and possible impacts on the stakeholders involved in the mining sector and also provides a comparative analysis of other foreign regulatory frameworks and suggests reforms.
Section 6A and Rationale behind it
Section 6A of the Act has enabled one-time extension of the area under a mining lease or composite licence to include therein a contiguous area not exceeding ten per cent or thirty per cent, respectively, of the existing area under the lease or licence, subject to such terms and conditions and additional payment as may be prescribed in rules by the Central Government. Before that, there was no statutory right to expand an existing lease.
There are two rationales to introduce such a clause in the Act. Firstly, there was an increase in the demand for minerals; therefore, to increase the availability of the minerals, there is a need to make the allocation process simpler. Secondly, to promote optimal mining of deep-seated minerals which are locked up in contiguous areas and may not be economically viable to be extracted under a separate lease or licence.
The legal character of Section 6A, however, remains contested. On one view, the provision merely facilitates the operational expansion of an existing mining lease by allowing a limited extension over geologically contiguous land, thereby improving mining efficiency without creating a new concession. On another view, the inclusion of a contiguous area effectively performs the function of a fresh allocation because it grants an existing lessee exclusive statutory rights over mineral deposits that were previously outside the leasehold.
Analysis of the Section and the Rules
Although the amendment seeks to improve mining efficiency, it has opened the gates of potential environmental, legal and constitutional ramifications, particularly in relation to the SC’s jurisprudence on the transparent and equitable disposal of public assets.
The constitutional concern is therefore not the absence of an auction, but whether Section 6A contains sufficient legislative standards to justify a departure from competitive allocation. The relevant inquiry is whether the statutory framework incorporates adequate transparency, objective eligibility criteria, independent valuation, reasoned decision-making and public-interest safeguards capable of preventing arbitrary or preferential allocation.
Natural resources are held by the State in trust for the benefit of the community under Article 39(b) of the Constitution. The SC has consistently recognised that competitive allocation is an effective means of promoting transparency, fairness, and equality in the distribution of such resources. At the same time, it has never treated auction as a constitutional requirement in every instance of natural resource allocation. Where the State chooses not to follow a competitive process, it must be able to suggest that its decision is supported by objective criteria, advances a legitimate public purpose, and contains adequate safeguards against arbitrariness or favouritism. Against this backdrop, the key constitutional question is whether Section 6A and the accompanying Rules provide a sufficient justification for allowing an existing lessee to obtain exclusive statutory rights over newly accessible mineral deposits possessing independent commercial value without requiring those deposits to undergo a fresh allocation process.
Section 6A may be constitutionally vulnerable because it introduces a legislative exception to competitive allocation without itself prescribing sufficient standards to justify that exception in terms of transparency, objective criteria, and public interest as given under Article 14 of the Constitution, as it confers discretionary power on the executive without clear guidelines. The SC in Centre for Public Interest Litigation v Union of India (para 9.14) underscored the need for a transparent and rational method in dealing with public assets. Similarly, in Manohar Lal Sharma v Principal Secretary & Ors (2014), the SC reaffirmed the doctrine of fairness, transparency and non-arbitrariness in the allocation of natural resources and observed that auction, when conducted fairly and impartially, is the most effective method of ensuring these constitutional values. Consequently, the concern is not that Section 6A dispenses with an auction, but whether it provides sufficient safeguards to justify such a departure from competitive allocation.
Also, automatic inclusion of contiguous or deep-seated minerals under existing leases may diminsh environmental scrutiny and may violate the State’s obligation to protect and improve the environment, which is held under Article 21 and Article 48A of the Constitution in M.C. Mehta v Union of India (1987) (para 40). Unregulated expansion not only threatens the environment but also impacts health, ecology and livelihoods.
In addition to this, the Rules do not appear to contain any express provision for procedural safeguards when contiguous areas are added to the existing leases for the affected nearby landowners or communities and potential competitors. This may raise concerns if expansion is permitted without reassessment under applicable environmental laws with the principle of fair procedure, which is also a part of Article 21 and was held by the SC in Maneka Gandhi v Union of India (1978).
The Rules made do not fully address the problems existing within the Section
For the implementation of Section 6A, the Ministry of Mines passed the Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession (Second Amendment) Rules, 2026 and the Mineral (Auction) Second Amendment Rules, 2026 in March, 2026 (together will be referred to as “Rules”).
Although the enactment of the Rules has introduced a detailed procedural framework for implementing Section 6A, the constitutional concerns surrounding the provision remain largely unaffected. Rules 25A, 25B, and 25C of the Ministry of Mines passed the Minerals (Other than Atomic and Hydro Carbons Energy Minerals) Concession (Second Amendment) Rules, 2026 prescribe the manner in which an existing mining lease or composite licence may be extended by requiring an application, proof of geological continuity, exploration to the prescribed standard, submission of geological reports, payment of additional consideration, and execution of a supplementary lease deed. Similarly, the amendments to the Mineral (Auction) Rules, 2015 merely facilitate the implementation of such extensions through procedural modifications.
However, these Rules do not alter the fundamental legal consequence created by Section 6A, namely, that an existing lessee may acquire exclusive rights over additional mineral-bearing land without that land being subjected to a fresh competitive allocation. This is because the newly included contiguous area is not merely an administrative adjustment to an existing boundary. It contains additional mineral deposits possessing independent commercial value over which the lessee receives exclusive statutory rights. The economic value of those deposits, together with the exclusion of all other potential participants from competing for access to them, distinguishes the expansion from a purely operational modification of an existing mining lease. The Rules regulate how this power is exercised but do not address whether such a departure from competitive allocation is constitutionally justified. Consequently, the constitutional inquiry does not turn on the adequacy of the procedural safeguards contained in the Rules, but on whether Section 6A itself provides a sufficiently rational and transparent legislative basis for dispensing with a fresh auction in favour of an incumbent lessee. Since delegated legislation cannot expand, restrict, or cure the substantive scope of the parent statute, the 2026 Rules may not fully resolve the continuing questions under Article 14 and the public trust doctrine regarding the preferential allocation of valuable public resources.
Comparative Perspectives and Jurisdictional Analogues
It has been observed that in foreign jurisdictions, regulations surrounding allocation processes are likely to encapsulate two objectives: (i) to maintain market integrity and (ii) to protect the interests of the people involved.
In Indonesia, under Decree Number 375.K/MB.01/MEM.B/2023 on the Guidance of Application, Evaluation, and Processing of Expansion of Mining Business License Area (WIUP) and Special Mining Business License Area (WIUPK) for Conservation of Mineral and Coals, there is detailed guidance on the procedure for expansion applications and evaluation. The decree has clear and precise application checklists (eligibility checks), mandatory technical and independent valuation steps (prescribed geological surveys and feasibility checks), required intergovernmental coordination (a fixed consultative timeline for provincial/state concurrence), competition safeguards (instead of auto expansion, a restricted re-auction), and transparent decision-making with monitoring (mandatory public disclosure of applications, valuation reports, decision memoranda and a public register of approvals and conditions).
In contrast to this, other countries like Australia and Canada follow the process where, for the approval for demand for additional mineral-bearing land, the legislation requires a separate statutory application process. In Australia, additional mineral-bearing land is not ordinarily brought within an existing mining lease as an automatic consequence of holding the original lease. Under State mining legislation, including the Mining Act 1978 (Western Australia) and the Mineral Resources Act 1989 (Queensland), rights over additional land generally require a separate statutory approval process, involving ministerial or administrative scrutiny under the relevant mining legislation and compliance with applicable environmental requirements. The legislation also subjects mining activities to environmental assessment and operational approvals, including programmes of work, mine development proposals, and mine closure obligations where applicable. Although this process does not necessarily involve a fresh competitive allocation, it reflects a preference for administrative scrutiny and regulatory oversight before additional land is brought under mining tenure.
Recommendations and Way Forward
While the 2026 Rules require the lessee to obtain all approvals and consents prescribed under existing law before commencing mining operations in the expanded area, they do not clearly address the environmental implications of a Section 6A expansion. This may create uncertainty regarding the extent of environmental scrutiny required when an existing lease is enlarged.
To address this, the Rules should expressly clarify that where the inclusion of a contiguous area results in a larger lease area, higher production capacity, or a greater environmental impact, the project must be reassessed under the applicable environmental laws. The framework should also specify whether such an expansion requires a revised Environmental Clearance, fresh forest clearance where forest land is affected, renewed consent to indicate or operate under pollution control legislation, and corresponding revisions to the Environmental Management Plan and Mine Closure Plan. In addition, where the expansion is likely to significantly affect the environment or nearby communities, a fresh public consultation should be required so that those likely to be impacted have a meaningful opportunity to participate in the decision-making process. These clarifications would not replicate the procedural safeguards already incorporated in Rules 25A and 25B. Rather, they would ensure that the objective of streamlining mineral allocation is balanced with environmental protection, public participation, and the broader principle of sustainable development.
Conclusion
The introduction of Section 6A marks a significant shift in India’s mineral allocation framework by recognising that, in limited circumstances, operational efficiency may justify the expansion of an existing mining lease without a fresh allocation. While facilitating access to contiguous and deep-seated mineral deposits is economically rational and consistent with the objective of optimal mineral utilisation, the constitutional validity of this framework is likely to depend on whether the departure from competitive allocation is accompanied by adequate safeguards against arbitrariness, preferential treatment, and executive discretion.
The Rules represent an important step towards regulating the implementation of Section 6A by introducing procedural safeguards. However, they cannot substitute for legislative standards that ensure transparency, objective eligibility criteria, reasoned decision-making, and environmental accountability where additional mineral-bearing land is brought within an existing lease.
Ultimately, the success of Section 6A should be measured not only by its contribution to mining efficiency but also by its ability to preserve transparency, fairness, and accountability in the allocation of public resources while remaining consistent with the constitutional principles embodied in Articles 14, 21, and 39(b).
(This post has been authored by Shreyansh Raj, 2nd Year student at National Law School of India University , Bengaluru)
CITE AS: Shreyansh Raj, ‘Reimagining Mineral Allocation In India: A Critical Analysis Of Section 6a Of The MMDR Amendment Act, 2025’ (The ContemporaryLaw Forum 6 August 2026) <https://tclf.in/2026/08/06/reimagining-mineral-allocation-in-india-a-critical-analysis-of-section-6a-of-the-mmdr-amendment-act-2025/> date of access.