Mineral and metal trading exchange might debut in India
What's the story
The Indian government is considering the establishment of a mineral and metal trading exchange, similar to the London Metal Exchange (LME) or Shanghai Futures Exchange (SHFE). The proposal was discussed in a recent Cabinet meeting and aims at improving price discovery in the sector. The move comes as part of India's push for increased mineral production and self-reliance amid rising supply chain disruptions.
Legislative changes
Amendments to Mines and Minerals Act
The government plans to amend the Mines and Minerals (Development and Regulation) Amendment Bill, 2025, to facilitate the establishment of these exchanges. The existing Act does not have any provisions for developing a mineral market or such a mechanism. The proposed changes are intended to be included in the ongoing session of Parliament.
Current scenario
MCX is India's largest commodity derivatives exchange
In India, the biggest commodity derivatives exchange is MCX, a publicly listed entity based in Mumbai. It enables online trading of various commodities such as gold, silver, crude oil, and natural gas. The Mining Ministry's Cabinet note highlighted global best practices where most mineral-rich countries have developed efficient trading exchanges supported by a legal framework.
Market development
Need for competitive mineral trading exchanges
The Cabinet note emphasized the necessity to develop similar mineral trading exchanges in India. It noted that major global mineral trading exchanges such as LME, Chicago Mercantile Exchange, SHFE, and ASX Metals Market in Australia set reference prices for minerals and metals. The note stressed on the need to establish competitive and transparent mineral trading exchanges where the minerals, their concentrates, or processed forms (metal) are traded.