A revision in India’s mining law is on the cards, with potential implications for vast tracts of land, forests, and the lives of communities living in mineral-rich regions. The draft Mines and Minerals (Amendment) Bill, 2026 proposes to remove area limits on the size of mining leases, allowing significantly larger areas to be brought under a single concession in a state. The Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act) has long been the backbone of mineral governance in the country. It sets out the framework for the exploration, allocation, and extraction of mineral resources, and structures the relationship between the state, mining companies, and communities living in mineral-bearing areas.
Section 6 of the Act specifies the maximum area in a state for which a prospecting licence or mining lease could be granted, with such ‘area limits’ for one or more prospecting licence capped at 25 square kilometres and for one or more mining leases capped at 10 square kilometres. This structure changed a little through one of the earlier amendments to the Act. The amendment empowered the Union government to increase the aforesaid area limit “in the interest of the development of any mineral or industry”, “for reasons to be recorded in writing”. In effect, the fixed statutory area limit began to co-exist with an executive discretion, justified on grounds of efficiency and economies of scale. The draft Bill of 2026 now seeks to remove area limits altogether, taking this gradual dilution of constraints to its logical conclusion.
The removal of area limits would affect leases for a wide range of major minerals such as iron ore, bauxite, chrome ore, copper, gold, manganese, lead and zinc. It would also extend to strategic and critical minerals such as lithium and rare earth elements, which have attracted growing policy attention. The government has justified this move by arguing that larger leases will increase participation in auctions, attract investment, enhance competitiveness, and enable economies of scale. However, the implications of removing area limits extend well beyond questions of efficiency or output.
These proposed changes come against the backdrop of ever persistent challenges in India’s mining sector, including environmental degradation, unresolved displacement, and gaps in enforcement of regulatory and social safeguards. Minerals are often framed as strategic national resources, particularly in the context of industrial growth and the global energy transition — a framing that is likely to gain further traction as demand for renewable energy technologies, electric vehicles, and battery storage expands. However, for people living in mineral-rich regions, extraction has frequently translated into land alienation, disrupted livelihoods, ecological damage, and weak access to justice. Any amendment to the MMDR Act therefore has consequences that extend far beyond mineral production, shaping land use, environmental outcomes, and the distribution of power between institutions and local communities.
Area limits formed part of the MMDR Act framework from the very beginning. In mineral-rich regions (almost always overlapping with forests, Adivasi territories, agricultural land, and rural settlements), this restriction performed several important governance functions.
First, area limits act as a structural check on concentration by limiting the extent to which mineral resources could be controlled by a single entity. This matters not only for competition, but also for public accountability. When a single operator controls a large share of a mineral-bearing region, the state’s ability to regulate effectively can become more challenging, particularly if that operator is economically significant, politically influential, or administratively difficult to discipline.
Second, area limits are intended to place a structural check on how spatially large mining operations can become. Mining impacts are rarely confined to individual project boundaries, and their intensity often increases as extraction spreads across larger, contiguous areas, affecting water availability, air quality, soil, forests, biodiversity, agriculture, and public health across regions. While area limits do not eliminate cumulative impacts across multiple leases (and their effectiveness ultimately depends on enforcement) they do, at least by design, restrict the scale of any single concession. By requiring larger mineralised tracts to be divided into separate concessions within the prescribed area limit, the framework potentially creates multiple approval, monitoring, and renewal sites rather than concentrating environmental risks within one expansive lease.
Third, area limits give the state some room to review and rethink decisions over time. It is true that several state governments have themselves, at times, argued for the removal or relaxation of area limits. Yet from a public accountability perspective, the very existence of area limits created at least a formal constraint that could be invoked by affected communities, researchers, or civil society groups to question excessive consolidation. Even where enforcement was uneven, the presence of a clear numerical ceiling provided a tangible benchmark against which executive decision could be scrutinised.
Removing area limits is geared to create greater corporate consolidation in the mining sector. Data from the Union Ministry of Mines’ Annual Report 2024–25 indicates that India has 3,007 mining leases for major minerals (excluding fuel, atomic, and minor minerals) covering approximately 2.82 lakh hectares or 0.282 million hectares. Strikingly, just 160 leases (just over 5 per cent of the total) account for over half of the leased area. Even within the current framework, spatial control over mineral-bearing land is already concentrated.
One of the minerals not included in these figures is coal, which typically operates over far larger contiguous areas. In Madhya Pradesh, for instance, coal mining leases have been permitted up to 125 square kilometres (12,500 hectares) using the executive discretion introduced through the earlier amendment — far exceeding the 500-hectare benchmark used in the ministry’s classification of major mineral leases. Such precedents demonstrate how dramatically concessions can expand once area limits are relaxed. Extending similar flexibility across minerals would likely intensify concentration further.
Large, well-capitalised corporations are better positioned to acquire extensive lease areas, potentially crowding out smaller operators. Associations representing smaller steel and pellet manufacturers have also opposed the move, warning that removing area limits would allow large, well-capitalised firms to corner mineral resources, and undermine fair access. Greater consolidation has implications beyond market structure. Notably, in a 2022 public consultation on proposed amendments to the MMDR framework, the ministry itself had cautioned that “allowing acquisition of disproportionately large mineral bearing areas would defeat the present system of auctioning of mineral concessions through fair and transparent mechanisms”. This acknowledgement underscores that area limits are not merely technical thresholds but are tied to the integrity of the auctioning framework itself.
These governance risks also intersect with existing social and environmental vulnerabilities. Mining-induced displacement in India is already marked by serious gaps and issues. These weaknesses persist even within the current framework. In Odisha’s Kashipur, for instance, long-term protests by residents against an alumina refining company over unfulfilled development promises and inadequate rehabilitation show how displacement and socio-economic grievances can persist years after a mine becomes operational. Removing area limits would allow much larger, contiguous lease holdings to be controlled by a single operator. When control over mineral-bearing land is consolidated into fewer, larger concessions, these governance risks also scale up. Regulatory lapses, environmental non-compliance, or financial distress affecting a single operator can have region-wide consequences. In practice, large operators may also acquire heightened economic and fiscal significance, potentially complicating enforcement and raising concerns akin to “too big to regulate” dynamics.
Removing area limits is therefore not merely a question of efficiency and economies of scale. It concentrates risk, cost, and control in fewer hands, while narrowing the space for oversight and accountability. As India revisits its mining law (again) the central question is not only how to extract minerals more efficiently, but how to govern extraction in a manner that is equitable, accountable, and ecologically sustainable. The removal of area limits risks further entrenching a model of extraction that prioritises profits over people and accelerated extraction over ecological sustainability. Mineral-rich regions are also people-rich and biodiversity-rich regions. Any reform of the MMDR Act must begin from that recognition. India’s mining regulations call for many reforms if we are to put people and environment at the centrestage. Removing area limits is not one of them.
Rohit Patwardhan is a researcher at the Centre for Financial Accountability, working on energy policy, finance, and their intersection.
Views expressed are the author’s own and don’t necessarily reflect those of Down To Earth