Step 1: Recall the cause of Acid Mine Drainage (AMD).
Acid Mine Drainage is produced when sulphide minerals react with oxygen and water, generating sulphuric acid.
Step 2: Identify the responsible mineral.
The most common sulphide mineral responsible for AMD is
\[
\boxed{\text{Pyrite }(FeS_2).}
\]
Its oxidation produces sulphuric acid and dissolved iron.
Hence,
\[
\boxed{(C)}
\]
is the correct answer.