Question 1

Since minerals are a state subject, state governments have exclusive rights to auction all critical and strategic minerals.

Accepted Answer

Under Part D of the First Schedule of the MMDR Act, the Central Government holds the exclusive authority to auction mining leases and composite licences for 24 specified critical and strategic minerals.

Question 2

Under the 2025 amendment, leaseholders can add any newly discovered mineral to their existing lease for free.

Accepted Answer

Only specific critical and strategic minerals can be added without additional payment to incentivize their production. Adding other non-critical major minerals requires an additional payment as per the new Eighth Schedule.

Question 3

Consider the following statements regarding the Mines and Minerals (Development and Regulation) Amendment Act, 2025:
1. It removes the 50% open market sale restriction on surplus minerals extracted from captive mines.
2. The mandate of the newly renamed National Mineral Exploration and Development Trust (NMEDT) is strictly restricted to domestic and offshore exploration within India's territorial waters.
3. Adding newly discovered critical minerals listed in Part D of the First Schedule to an existing mining lease requires a mandatory auction premium payment.

How many of the above statements are correct?

Accepted Answer

(a) Only one — Statement 1 is correct: The 2025 amendment completely removes the previous 50% cap on the sale of surplus minerals from captive mines. Statement 2 is incorrect: The NMEDT's mandate was explicitly expanded to fund exploration and mine development outside India (overseas) in addition to domestic and offshore areas. Statement 3 is incorrect: To incentivize extraction, the amendment allows critical/strategic minerals to be added to an existing lease without any additional royalty or auction premium payment.

Question 4

Match List I (Provisions under MMDR Amendment Act 2025) with List II (Associated Limits/Rates):

List I
A. NMEDT royalty contribution rate
B. Limit on open market sale of minerals from captive mines
C. Maximum contiguous area expansion for Composite Licences
D. Maximum contiguous area expansion for Mining Leases

List II
1. 30%
2. 3%
3. No limit
4. 10%

Select the correct answer using the code given below:

Accepted Answer

(a) A-2, B-3, C-1, D-4 — A matches 2: The contribution to the National Mineral Exploration and Development Trust (NMEDT) was increased from 2% to 3%. B matches 3: The previous 50% cap was removed, meaning there is now no limit on sales from captive mines. C matches 1: A one-time extension of up to 30% of the existing area is allowed for Composite Licences for deep-seated minerals. D matches 4: The limit for Mining Leases is 10%.

Question 5

Assertion (A): The MMDR Amendment Act, 2025 introduces the Eighth Schedule to mandate additional payments for adding any new mineral to an existing mining lease.
Reason (R): The government aims to maximize revenue from the extraction of critical and strategic minerals which are in high global demand.

Select the correct answer:

Accepted Answer

(d) Both A and R are false — Assertion (A) is false because the addition of *critical and strategic minerals* (Part D, First Schedule) is entirely exempted from the additional payments specified in the Eighth Schedule. Reason (R) is false because the government's aim for critical minerals is not to maximize immediate state revenue, but rather to aggressively incentivize their extraction by waiving extra payments, ensuring supply chain security.

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