India: Govt unveils draft Mineral Exchange Rules 2026

• Ministry of Mines has invited suggestions to be submitted till 18 Apr’26
• Proposes establishment of regulated mineral exchanges to enhance transparency, efficiency, and price discovery in India’s mineral markets

The Ministry of Mines has released a draft of the Mineral Exchange (Regulation) Rules, 2026 for stakeholder consultation, proposing the establishment of regulated mineral exchanges to enhance transparency, efficiency, and price discovery in India’s mineral markets.

The proposed framework, issued under the Mines and Minerals (Development & Regulation) Act, 1957, aims to create a structured electronic marketplace for trading minerals, their concentrates, and processed forms, excluding those already governed under existing schedules. In light of the above, stakeholders are requested to submit their comments and suggestions on or before 18 April 2026.

Key objectives and scope

The draft rules envision mineral exchanges as platforms to facilitate delivery-based contracts, ensuring fair, competitive, and transparent price discovery. The exchanges will also aim to streamline supply chains and ensure timely delivery of commodities.

The regulations will apply to all market participants, including exchanges, members, clients, and assaying agencies, while explicitly excluding instruments regulated by the Securities and Exchange Board of India (SEBI).

Regulatory oversight and governance

The Indian Bureau of Mines (IBM) has been designated as the key regulatory authority overseeing mineral exchanges. It will handle registration, supervision, inspections, and enforcement actions.

To ensure robust governance, exchanges must:

• Maintain a minimum net worth of INR 50 crore
• Follow a demutualised structure separating ownership and trading rights
• Ensure independent directors form at least half of the board
• Restrict shareholding by members and clients to 5% individually and 49% collectively
• Registration will be valid for 25 years, with provisions for renewal and strict compliance requirements.

Market integrity and risk controls

The draft introduces stringent measures to curb market manipulation, cartelisation, insider trading, and circular trading. Exchanges will be required to maintain surveillance systems, audit trading algorithms, and implement automated audit trails for transactions.

A settlement guarantee fund will be mandatory to manage default risks, while detailed clearing and settlement mechanisms will ensure financial discipline across transactions.

Trading, contracts, and price discovery

All transactions on mineral exchanges will be conducted through approved contracts with defined specifications covering pricing, delivery, quality assurance, and risk management.

Price discovery will be carried out through transparent bidding mechanisms approved by the regulator. Additionally, the authority will have powers to – introduce or suspend contracts, impose price caps or floors during extreme volatility and temporarily halt trading in exceptional circumstances

Data transparency and reporting

To improve market transparency, exchanges will be required to publish – price trends, trade volumes, demand-supply curves and historical data

Monthly transaction reports must also be submitted to the regulator, along with annual audited financials.

Transition and compliance

Existing commodity trading platforms will be required to register under the new framework within six months of operationalisation of the first approved mineral exchange, failing which they must cease operations.