The Indo British Government, way back in 1901 felt the strong need of establishing a mines college in India in the lines of Royal School of Mines The Government was feeling the need as the Mines Bill was becoming a law vide Indian Mines Act - VIII. The concept of establishing a mines institute was well supported by Indian National Congress (INC).

A committee was formed in the Chairmanship of Macpherson, Chief Secretary, Government of Bihar and Orissa. The committee has studied the system of mining education in England and recommended to establish an institute in similar lines as that in England for education in mining.

On the recommendations of expert committee The Indian School of Mines was formally opened by his Excellency the Vice Roy Lord Erwin on 9th. December, 1926. The ISM, Dhanbad has got full financial support from the then Indo British Government.