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01 Press Note on Minor Mineral Policy 2025_v2

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Satish V Madala
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01 Press Note on Minor Mineral Policy 2025_v2

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Satish V Madala
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© © All Rights Reserved
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PRESS NOTE –

CABINET APPROVES REFORMS IN MINOR MINERAL POLICY -


RELIEF FOR MINING SECTOR AND MSME’s
15th APRIL 2025
• The mining sector plays a crucial role in the state’s Gross Domestic
Product (GDP) and provides employment, thereby supporting local
communities. However, the contribution of the mining sector to GDP
declined from 3.53% in 2018-19 to 2.71% in 2023-24.
• To correct these issues and make the sector self-sufficient, investment-
friendly, and a major employment contributor, a new minor minerals
policy is essential.
• Therefore, in line with the current Government’s commitment to revive
the sector and support legitimate stakeholders, the Andhra Pradesh
Cabinet, chaired by Hon’ble Chief Minister, approved the AP Minor
Minerals Policy 2025 on 15th April 2025.
• This policy marks a major shift towards transparency, fairness, and
ease of doing business.
• It also provides long-pending relief to leaseholders who were adversely
affected by the rigid provisions of the 2022 framework, signaling a
strong pro-reform stance and renewed focus on sustainable mining and
investor confidence.
• Key Features of Minor Mineral Policy 2025 are as follows:
1) Disposal of Pending Applications:
a) In 2022, Government eliminated the application route entirely
for Government lands, forcing the grant of all minor mineral
leases into a one-size-fits-all auction mechanism.
b) This move made more than 6,000 applications ineligible.
c) The cabinet took a decision to dispose all the pending
applications as on Mar’22 through application basis on First
Come First Serve Basis.
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d) These applications are only eligible for issue of LOI for a period
of 1 year.
e) The applications where the LOIs are not issued within the
stipulated period shall become ineligible and shall be disposed
through auction.
2) Balanced Approach to Grant of Leases in New Areas: In 2022,
Government eliminated the application route entirely for
Government lands, forcing the grant of all minor mineral leases into
a one-size-fits-all auction mechanism.
a) Granite and building materials (like road metal, gravel, and
building stone) to be granted via the application route, to meet
housing, irrigation, and infrastructure needs.
b) Industrial minerals (like silica sand, quartz, dolomite) to be
granted via the auction route with production-linked premium.
The percentage of seigniorage fee shall be the parameter for
auction instead of one-time premium.
c) Patta, DKT, and forest lands are continued to be granted under
the application route for all minor minerals.
3) Rationalization of Premium Amounts
a) Premium amount for grant of leases (Pending Applications, New
Areas or Renewals) reduced from 10 times of Dead Rent to a
uniform levy of 5 times of Dead Rent, payable in two easy
instalments across 2-3 years.
b) Instalment mechanism eases financial strain on leaseholders.
c) For limestone slabs, the premium amount further reduced to 3
times of Dead Rent to support labor intensive industry.
4) Grant of renewals:
a) Premium amount reduced from 10 times of Annual Dead Rent
to 5 times of Annual Dead Rent payable in two instalments.

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b) All renewal applications, irrespective of date of filing and
payment of premium amounts, will be considered for six months
on payment of reduced premiums.
5) Dead Rents: Dead Rents also revised basing on the mineral. Annual
Adjustment of Dead Rents towards Seigniorage Fee instead of
Quarterly adjustments facilitate the leaseholders for full use of
funds.
6) Increase in Lease periods for New Leases & Renewals
a) Granite & Industrial Minerals: Increased from 20 years to 30
years for new leases and from 10 years to 20 years for renewals
b) Road Metal (Captive use in Crushing Industry): Increased from
15 years to 30 years for new leases and from 10 years to 20 years
for renewals
c) Others: Increased from 5 years to 10 Years
d) All renewals which were granted earlier on payment of 10 times
of Annual Dead Rent shall be aligned to the new renewal periods
7) Revocation of Consideration Amount and Revision of
Seigniorage Fee
a) Consideration Amount levied in 2021 @ 100% of Seigniorage for
all minor minerals except Granite and 50% of Seigniorage for
Granite, for covid-pandemic related expenditure after already
enhancing the Seigniorage Fee in 2020. However, it continued
even after pandemic.
b) Consideration Amount for all minor minerals is revoked.
c) Seigniorage Fee is revised ensuring no additional burden.
d) Introduced a uniform tonnage based Seigniorage Fee to remove
ambiguity and arrest leakages.
e) No increase of Seigniorage Fee for Dolomite, Shale & Slate
facing competition from neighboring States to help the industry.

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f) Ensures price parity, prevents outward migration of industries,
and boosts value-added processing
8) Seigniorage Collection Contract: To be extended to remaining
districts to have a uniform procedure for collection of Seigniorage
Fee across the state and to have an assured revenue to state
exchequer.
9) One-Time Settlement (OTS) Scheme for Legacy Issues
a) To resolve the long backlog of disputes and penalties from prior
years, a one-year OTS window is introduced to allow
leaseholders to settle past violations and penalty demands.
b) Penalties have been rationalized from 10 times of Seigniorage
Fee to 2 times of Seigniorage Fee, and from 5 times of
Seigniorage Fee to 1 time of Seigniorage Fee.
c) This will help restart closed quarries, reduce litigation, and
recover government dues efficiently
10) Digital Governance
a) Entire lease lifecycle from application to surrender, renewal,
transfer, and compliance will now be done through a fully
digitized portal.
b) Use of Drone surveys, CCTV Cameras, weighbridges, Mine
Surveillance System to monitor mining activity in real time.
11) Sustainable Mining & Scientific Closure
a) Leases for Dumping: Leaseholders can also get additional land
as extension of the existing lease for dumping of overburden/
waste. 3 times of Dead rents will be charged for grant of leases
for dumping.
b) Disposal of Waste:
• Permission to dispose the Limestone slab waste / Granite
waste.

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• For limestone slab waste, Disposal allowed on payment of
50% of Seigniorage Fee fixed for limestone slabs.
• Disposal of Granite waste within the lease area shall be
allowed on payment of Seigniorage Fee fixed for Road Metal
c) Disposal of Dumps:
• Overburden Dumps in vacant government lands or expired
leases shall be auctioned for better resource utilization.
• Auction is based on Pit Mouth Value of material
d) Star Rating for Minor Minerals: Introduction of a Star Rating
Framework for Minor Minerals to recognize good mining
practices and compliance.
e) Exemption of payment of fee for transfer of leases to immediate
family members (Son, Daughter, Father, Mother)
f) All abandoned and expired leases to be scientifically closed
within one year.
g) Inter Departmental co-ordination Committee with the officials
of Mines, Revenue, Environment, Forest, SEIAA, PCB shall be
formed to facilitate the clearances.
h) Set up state level and district level inter departmental task force
to control illegal mining.
The policy during 2019-24 shut the door on small miners and burdened
industries with arbitrary charges. We have reversed that injustice. This
government believes in responsible mining, local employment, and trust-
based governance. The new policy is leaseholder-centric, practical, and
future-ready.

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