1. What is the current legal landscape for Mining Law in your jurisdiction?

The Indian mining sector operates within a comprehensive statutory and regulatory framework. Under the Constitution of India, state governments are responsible for administering mineral resources within their respective territories. However, the central government retains the legislative authority in cases where the central parliament has declared that central control over mines and minerals is necessary in the public interest. The principal statute governing mining projects in India is the Mines and Minerals (Development and Regulation) Act, 1957 (“MMDR Act”), supported by the Mineral Concession Rules, 1960 and a wide range of mineral-specific, environmental, land, safety, and state-level legislations.

The MMDR Act forms the basis of the mineral concession framework in India. An entity cannot undertake reconnaissance, prospecting, or mining activities without the required permit, licence, or mining lease. The MMDR Act addresses the key aspects of mining concessions, including eligibility, applications, area limits, royalties, dead rent, transfers, penalties, and mine closure. India’s coal mining sector underwent a fundamental structural transformation in the early 1970s, when the Government of India nationalised coal mining to strengthen energy security, promote planned development, and ensure public control over a strategically important natural resource. Over time, rising energy demands and the need to increase domestic coal production, improve efficiency, attract investment, and adopt modern mining technologies prompted the Government to reconsider this largely government-controlled model. India therefore began gradually opening the coal mining sector to private participation. This shift was driven by a series of legislative reforms, policy changes, and judicial developments that steadily shifted the sector away from an almost exclusively government-controlled framework towards a more competitive and commercially oriented market.

It is pertinent to note that oil and gas mining follows a separate legislative regime and is excluded from the MMDR Act.

2. What three essential pieces of advice would you give to clients involved in Mining Law?

From a practical standpoint, successfully navigating India’s mining law regime demands a combination of regulatory foresight, environmental diligence, and adaptability to a rapidly shifting legal landscape. Mining operations in India are governed by a layered regulatory framework, and therefore:

(i) Clients should ensure they obtain all necessary approvals under MMDR Act, environmental clearances under the Environment Protection Act, 1986, forest clearances under the Forest (Conservation) Act, 1980, and Consent to Establish/ Consent to Operate (CTE/CTO) from State Pollution Control Boards well before commencing operations. Delays or lapses in any of these can halt operations entirely and attract monetary penalties, including criminal prosecution, under the respective legislations.

(ii) Following the 2015 amendments to the MMDR Act, mineral concessions for major minerals are generally awarded through a transparent auction process, including e-auctions. Clients seeking to bid for grant of a reconnaissance permit, prospecting licence, composite (prospecting-cum-mining) licence, or mining lease therefore need to carefully assess the financial obligations involved, including the revenue share, upfront payments, royalty, and performance security. These costs should be evaluated alongside expected production volumes and prevailing or projected commodity prices to determine the overall commercial viability of the project.

(iii) Clients should ensure a strict adherence to the regulatory compliance, given that India’s mining regulatory framework is constantly evolving. Investment models and compliance frameworks based on a one-time assessment of applicable law may prove insufficient. By way of illustration, the treatment of contributions to the District Mineral Foundation (“DMF”) and the National Mineral Exploration Trust (“NMET”) in the computation of Average Sale Price (“ASP”) under Rule 38 of the Mineral (Other than Atomic and Hydrocarbons Energy Minerals) Concession Rules, 2016 (“MCR”) has been a subject of constant judicial dispute. The explanation to Rule 38 of the MCR provides that no deduction from the gross sale value will be made in respect of royalty, DMF, and NMET contributions. This rule has been challenged on the grounds that including royalty, DMF and NMET payments in the ASP resulted in “royalty on royalty” and created a cascading financial burden. In the case of Kirloskar Ferrous Industries Ltd. & Anr. v. Union of India & Ors. (2026 INSC 679), the Hon’ble Supreme Court of India officially upheld the validity of Rule 38 of MCR including DMF, NMET and royalty payments in the calculation of the ASP.

Clients should therefore consider establishing a robust mechanism for a substantially dynamic regulatory monitoring.

3. What are the greatest threats and opportunities in Mining Law in the next 12 months?

The most significant threat within the Indian mining law regime arises from the ongoing jurisdictional issue between state governments and the central government concerning the taxation of mineral rights and mineral-bearing lands. In the case of Mineral Area Development Authority & Anr. v. M/S Steel Authority of India & Anr. (2024 INSC 554), the Supreme Court of India held that state governments possess the legislative competence to levy taxes on mines and minerals. This landmark decision opened the door for state governments to impose taxes on major minerals and on mineral-bearing lands, calculated on the basis of the value of minerals extracted therefrom, in addition to collecting royalty payments.

However, the fiscal autonomy of state governments was soon curtailed by legislative intervention. The MMDR Amendment Act, 2026 introduced Section 9D into the MMDR Act, which curtails the power of state governments to impose taxes and levies on mineral rights and mineral-bearing lands unless expressly permitted by the central government. Section 9D(2) further provides that all levies relating to mineral rights and mineral-bearing lands that have not been recovered by the relevant state government will stand invalidated, however, amounts already paid to or recovered by such state government are protected. This legislative intervention introduces considerable uncertainty regarding the validity of pre-existing tax levies by state governments and is likely to give rise to disputes concerning their legitimacy and quantification. Many Indian states including Jharkhand, Karnataka, Telangana are likely to challenge the constitutional validity of the MMDR Amendment Act, 2026 before the Supreme Court of India.

Significant opportunities have also emerged for stakeholders within the mining ecosystem, most notably through the introduction of a formal mineral trading framework. The Mineral Exchange Rules, 2026 issued by the Ministry of Mines (“Mineral Exchange Rules”) represent the most significant opportunity within the Indian mining law regime, introducing India’s first regulated electronic exchange for mineral trading under the supervision of the Indian Bureau of Mines. The Mineral Exchange Rules set out critical provisions relating to, inter alia, the establishment and registration of regulated exchanges, trading through standardised contracts, governance frameworks, and data transparency. One of the most noteworthy developments is the introduction of a price discovery mechanism, whereby prices are determined through competitive market participation rather than bilateral negotiations.

Similarly, the Coal Exchange Rules, 2026 issued by the Ministry of Coal (“Coal Exchange Rules”) also establish a regulated electronic framework for transparent, competitive, and delivery-based trading of coal, lignite, and their processed forms in India under the supervision of the Coal Controller of India.

The Mineral Exchange Rules and the Coal Exchange Rules are expected to facilitate improved ease of doing business in India and promote a more efficient and technology-driven mineral market.

4. How do you ensure high client satisfaction levels are maintained by your practice?

India’s mining regulatory landscape is evolving at an extraordinary pace, and we at AZB & Partners, invest considerable time and resources to anticipate and resolve legal or regulatory issues affecting our clients, flagging risks before such issues materialise. This proactive approach has helped us forge and maintain lasting client relationships.

Our key strength is our in-depth understanding of legal, regulatory, and commercial environments in India. Our advice is shaped by what matters commercially, whether that is structuring a bid to optimise revenue share obligations, sequencing environmental and forest clearances to avoid timeline bottlenecks, conducting comprehensive legal due diligence, or navigating centre-state tax exposures following the MMDR Amendment Act, 2026. We aim to provide clear, concise, and practical counsel and not abstract legal opinions.

In essence, our commitment to client satisfaction is rooted in a combination of deep sectoral expertise, commercial pragmatism, and a relationship-driven approach that prioritises our clients’ long-term success in India’s dynamic mining sector.

5. What technological advancements are reshaping Mining Law and how can clients benefit from them?

Technological advancements are increasingly reshaping the regulatory and operational landscape of mineral mining in India. Key developments in this regard are discussed below:

(i) E-Governance Systems: A majority of Indian states, including Odisha, Madhya Pradesh, Jharkhand, and Gujarat, are digitising their governance systems for the administration of mining-related activities, including the issuance and management of permits, conduct of auction processes, and monitoring of mineral production and dispatch. A notable example is Odisha’s Integrated Mines and Mineral Management System, an e-portal that enables end-to-end tracking of minerals, issuance of permits, and administration of royalty payments. Such e-governance systems significantly reduce the paperwork burden on clients, shorten approval timelines, and enhance overall transparency in the regulatory process.

(ii) Vehicle Tracking: Section 23C of the MMDR Act empowers State Governments to issue state-wide directions for the prevention of illegal mining, storage, and transportation of minerals. Pursuant to this provision, several states, including Uttar Pradesh, Odisha, Karnataka, and Rajasthan, have mandated that vehicles engaged in the transportation of minerals be fitted with RFID tags, GPS devices, or other vehicle tracking systems. These tracking requirements are expected to reduce pilferage risks for clients, particularly when engaging third-party transporters or contractors for mine development operations.

(iii) Drone Surveys: One of the most significant technology-driven compliance requirements is the mandatory drone survey obligation prescribed under Rule 34A of the Mineral Conservation and Development Rules, 2017 (as amended from time to time). These drone survey requirements are expected to strengthen mine planning and management for clients. The resulting data can also facilitate the monitoring of lease boundaries, the identification of deviations from approved mining plans, and the assessment of environmental changes.