← Policy & Regulation: Pricing and Tariff Control (all topics)
MMDR mineral concession auction regime
What it is
Since the MMDR Amendment Act 2015, mineral concessions are granted only through competitive auction rather than administrative allotment, with the winning bidder paying a percentage of mineral value to the state on top of statutory royalty
Six tranches of critical mineral auctions have run, and FY2025-26 saw a record 212 blocks auctioned including 22 critical mineral blocks
Impact on industries
- Transparent allocation ended the discretionary regime that produced India's mining scandals, and auction revenue accrues to state governments
- 2026 rules allow insurance surety bonds instead of bank guarantees, easing the financial burden on bidders and widening participation
- Aggressive auction premiums bid in strong markets become a fixed cost through the cycle, since the premium is a percentage of sale value regardless of price
- Blocks are often greenfield and poorly explored, so the bidder carries exploration and clearance risk - auction counts overstate near-term supply