Under the leadership of Chief Minister Bhagwant Singh Mann, the Punjab government has implemented historic reforms in the state’s mining sector. Significant amendments to the Punjab Minor Mineral Policy have been approved, aiming to ensure adequate supply of raw materials, curb illegal mining and corruption, reduce prices for consumers, increase state revenue, and eliminate monopolies.
After extensive consultations with stakeholders at various levels, the Cabinet approved these amendments, which include the introduction of new mining categories, modernization of the auction system, and simplification of regulatory processes. These significant reforms mark a historic shift towards transparency, fairness, and citizen-friendly governance in the mining sector.
Speaking on these reforms, Mining and Geology Minister Barinder Kumar Goyal said that our government is committed to eliminating the complexities in the mining sector and ensuring that natural resources are utilized for the benefit of the people. He said that by moving towards transparent online auction processes, we are increasing state revenue and curbing illegal mining while ensuring a level playing field for genuine operators.
He said that for years, Punjab’s mining sector faced a severe shortage of authorized mining sites. With only about 35 mines operational across the state, the legal supply of construction materials needed for roads, housing projects, and infrastructure projects was far less than the demand. This gap created a void, leading to the proliferation of illegal mining and unregulated supply chains.
To address this structural problem, the Punjab government adopted a clear strategic approach. Instead of focusing solely on curbing illegal activities, the government decided to gradually bring mining supply into the legal framework. Under this initiative, operators are being encouraged to come forward, disclose their existing mining activities, complete the necessary documentation, and operate strictly within the prescribed regulatory framework. The government has made it clear that mining will continue, but only if it is conducted legally, transparently, and with the appropriate approvals.
- Crusher Mining Sites for Strengthening the Local Industry
A major reform under the revised policy is the introduction of Crusher Mining Sites (CRMS) to address the long-standing issues faced by the crusher industry. Previously, the auction of mining material was limited to commercial mining sites by the department, leading to a persistent shortage of raw materials. Despite owning land with gravel deposits, crusher owners were not permitted to utilize it, forcing them to rely on CMS output or procure material from other states, often at exorbitant prices.
Under the CRMS framework, crusher owners who own land with gravel deposits can now obtain mining leases and extract mining material for their operations. This reform is expected to significantly increase the availability of gravel and sand, accelerate development projects across Punjab, reduce dependence on other states, and strengthen development activities throughout the state. This will reduce reliance on other states, curb illegal inter-state mineral movement, create employment opportunities within the state, improve the efficiency of the crusher industry, increase state revenue, and lower prices for consumers.
- Land-Owner Mining Sites to Empower Farmers and Eliminate Monopolies
In addition to the existing commercial mining sites and public mining sites, the government has also introduced Land-Owner Mining Sites (LMS) for sand mining. Previously, sand mining operations were often hampered because landowners were hesitant to allow unknown operators onto their land. In addition, the actual landowners frequently contacted the government to obtain permission to mine on their own land.
The LMS framework now allows landowners to mine sand from their land, either themselves or through authorized persons, upon payment of royalty to the state government. This reform is increasing the number of legal mining sites, which will boost sand supply and state revenue, lower consumer prices, and create new business opportunities for Punjabis. Furthermore, it will ensure that every eligible landowner can obtain a mining lease and sell the mined material in the open market, which will go a long way in eliminating monopolies.
Smooth Approvals and Strong Industry Support
This policy is also effectively addressing common obstacles in the mining sector, such as regulatory delays. Previously, mining-related certification and environmental clearances through institutions like the State Environment Impact Assessment Authority (SEIAA) often took seven to nine months, and in some cases, even several years. Now, these processes have been put on a mission mode, with multiple clearances being processed simultaneously, ensuring timely decisions without compromising the regulatory framework.
These reforms have provided a significant boost to the mining sector, and the government has received 290 applications under the CRMS and LMS categories. Processing of these applications is underway, with 26 Letters of Intent already issued. The remaining applications will be processed expeditiously once the necessary procedures, including inclusion of sites in district survey reports, are completed.
Over 200 new mining sites have been identified in the districts, with surveys, technical investigations, public consultations, and environmental impact assessment studies currently underway. Most of these mines are expected to be operational between December 2025 and March 2026, significantly alleviating supply disruptions and reducing the burden on existing sites.
Officials stated that the preliminary approvals reflect planned reforms to the mining supply chain. They stated that wherever mining operations continue, they must be in accordance with legal, documented procedures, and regulatory approvals. Strict action will be taken against any activity outside this framework. They reiterated the state government’s commitment that mining is permitted, but any laxity towards illegal activities will not be tolerated.
- First transparent auction process in three years and major reforms
Reaffirming its commitment to smooth and good governance, the Punjab Government has launched a new auction process for mining sites, the first such process in three years. In the first phase of this process, 29 sites were auctioned as commercial mining sites through an open and competitive online bidding process, receiving 16 successful bids and generating revenue of ₹11.61 crore.
To address systemic deficiencies in the old auction model, which often led to problems such as lottery draws, the involvement of fake bidders, revenue loss, and delays, the Cabinet has approved comprehensive reforms in line with national best practices. These reforms include the adoption of a price-based bidding system, ensuring pre-determined, appropriate payments from bidders, advance royalty payments for stable revenue flows, facilitating the transfer of responsibility for environmental clearances to bidders, clear dead rent provisions to prevent speculation, and extending the lease period from three years to five years for greater operational stability.
With approximately 100 more sites being brought under auction in a phased manner, these reforms are expected to ensure improved availability of raw materials for industry, increased state revenues, faster mine operations, and strengthened regulatory clarity and transparency.
Officials said the introduction of CRMS and LMS, streamlined approvals, and new auction systems reflect comprehensive reforms in Punjab’s mining sector aimed at eliminating illegal mining, increasing revenues, and ensuring that natural resources are managed in a clean, fair, and people-centric manner.
