Govt has allocated ₹40,000 crore for scientific mine closures, says Union Coal Minister G. Kishan Reddy
The government has earmarked a corpus of about ₹40,000 crore (roughly $5 billion) for the scientific and progressive closure of coal mines
Thirty-three coal mines were scientifically closed during FY 2025-26, taking the cumulative total of scientifically closed mines to 42
The target is to scientifically close 147 additional coal mines over the next two to three years
For the first time, 25% of the approved mine closure cost has been earmarked specifically for community development, creating an estimated investment potential of nearly ₹10,000 crore over the next decade
The closure programme is being implemented through the Mine Closure Guidelines, 2025, supported by the RECLAIM Framework, the SUVIKALP digital platform, the ARTHA Framework, and District Collector-led Mine Closure Advisory Committees
Mine Closure under the MMDR Act, 1957 and the Mineral Conservation and Development Rules (MCDR)
The Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act) is the principal legislation governing regulation of mines and mineral development in India. Section 18 of the Act empowers the Central Government to frame rules for conservation and systematic development of minerals, including scientific mine closure — operationalised through the Mineral Conservation and Development Rules (MCDR), currently the MCDR 2017 (amended 2021), which succeeded the earlier MCDR 1988.
Key Details
- Every mining lease holder must prepare a Progressive Mine Closure Plan (implemented concurrently with mining operations, reviewed every five years) and a Final Mine Closure Plan (submitted at least one year before the proposed closure of the mine)
- Financial assurance (a performance security) must be furnished by the lease holder to guarantee implementation of the closure plan; the Mineral Conservation and Development (Amendment) Rules, 2021 raised this to ₹5 lakh per hectare for Category 'A' mines and ₹3 lakh per hectare for Category 'B' mines (up from ₹3 lakh and ₹2 lakh respectively)
- The 2021 amendment also introduced forfeiture of the financial assurance if the final mine closure plan is not submitted within the specified period
- MCDR is administered by the Indian Bureau of Mines (IBM) under the Ministry of Mines, distinct from the Ministry of Coal's role for coal-specific mines
The ₹40,000 crore corpus and the 2025 guidelines operationalise the statutory mine closure obligations under the MMDR Act framework at a scale not previously funded, with an explicit community development component layered on top of the existing financial assurance regime.
Mine Closure Guidelines, 2025 — RECLAIM, SUVIKALP and ARTHA Frameworks
The Mine Closure Guidelines, 2025 reorient India's approach to mine closure from a purely technical/environmental exercise toward one centred on affected communities and post-mining land repurposing. They are supported by three linked instruments: the RECLAIM Framework (a structured community engagement and development framework guiding social and ecological transition in mining-affected areas), the SUVIKALP digital platform (an interactive tool to evaluate and select viable repurposing options for closed mine sites), and the ARTHA Framework, overseen locally through District Collector-led Mine Closure Advisory Committees.
Key Details
- The guidelines mandate that 25% of the approved mine closure cost be set aside for community development — a new requirement layered on top of existing environmental/ecological restoration obligations
- Repurposing options facilitated through SUVIKALP can include eco-restoration, renewable energy installations, water bodies, or other productive post-mining land uses
- The approach is positioned as complementary to India's broader energy transition planning, given coal's continuing share of domestic power generation alongside rising renewable capacity addition
- Institutional oversight is decentralised to the district level through Mine Closure Advisory Committees chaired by District Collectors, aligning closure planning with local development priorities
The 33 mines closed in FY 2025-26 and the target of 147 more over the next two to three years are being implemented under this 2025 guideline architecture, with the ₹40,000 crore corpus funding both environmental restoration and the new community development mandate.
Ecological Restoration Dimension of Mine Closure
Scientific mine closure in India straddles both an economic regulatory function (ensuring lease holders do not abandon land without remediation) and an environmental restoration function (reclaiming mined-out land, addressing subsidence, water contamination and loss of vegetation cover in coal-bearing regions).
Key Details
- Environmental clearance conditions for mining projects under the Environment Impact Assessment (EIA) Notification, 2006 typically require progressive reclamation of mined-out areas as mining advances, rather than only at final closure
- Abandoned or improperly closed mines are associated with land degradation, acid mine drainage, and loss of forest cover, particularly relevant in India's major coalfields (e.g., in Jharkhand, Chhattisgarh, Odisha, West Bengal)
- Scientific closure frameworks aim to convert post-mining land into productive uses (afforestation, water bodies, renewable energy sites) rather than leaving it degraded
- The initiative aligns with broader "just transition" principles being discussed internationally for coal-dependent regions as energy systems shift toward cleaner sources
The scale-up in scientific mine closures reflects an attempt to address the ecological legacy of coal mining alongside the sector's continuing operational expansion, funded through the newly announced corpus.
- Corpus allocated for scientific mine closure: approximately ₹40,000 crore (~$5 billion)
- Mines scientifically closed in FY 2025-26: 33; cumulative scientifically closed mines: 42
- Target for additional scientific closures: 147 mines over the next 2-3 years
- Share of mine closure cost earmarked for community development: 25%, with investment potential of nearly ₹10,000 crore over the next decade
- Financial assurance under MCDR (2021 amendment): ₹5 lakh/hectare (Category A), ₹3 lakh/hectare (Category B)
- Final Mine Closure Plan must be submitted at least one year before proposed mine closure; Progressive Mine Closure Plan reviewed every five years