Dr P.K. Jain, Chief Mineral Economist, Indian Bureau of Mines, Nagpur, delivered the Foundation lecture on the Mining Scenario in India at the 37th AGM of the Gondwana Geological Society.

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Dr P.K. Jain, Chief Mineral Economist, Indian Bureau of Mines, Nagpur, delivered the Foundation lecture on the Mining Scenario in India at the 37th AGM of the Gondwana Geological Society, at the Conference Hall, Directorate of Geology and Mining hqs., Govt of Maharashtra, Nagpur  on 12.10.2018 .

India’s mining sector has been undergoing a progressive change with paradigm shifts in mining laws and policies, since the past few years. It provides direct employment to 4.88 lakh people (2015-16) of which 0.78 lakh are in the metallic, 0.29 lakh in the non-metallic and 3.81 lakh in the fuel (coal and energy sectors), apart from the millions of jobs it creates indirectly. The per capita consumption of minerals is 61 Kg in urban and 10 Kg in the rural sector. The world average per capita consumption is 256 Kg. India is the world’s third largest producer of steel. The annual production of steel is 102 million tonnes and we aim to reach 300 million tonnes by 2030. Uninterrupted raw material supply is essential for sustained growth. In 2016, India’s mining sector contributed Rs 308,200 crores to the economy. To enable the mining sector increase its contribution to the nation’s GDP from 2.5 % as of now to the targeted 4 %, we need to augment our mineral resources, enhance innovation and technological upgradation, create better infrastructure and human resources and provide speedy mineral concessions.  It is important to also develop technology to extract valuable by-products which we are not able to at present. Gallium, used in semiconductors is a valuable by-product of aluminium ore bauxite and  is not optimally extracted in India. India has imported Rs 738,788 crores worth of minerals and metals during 2015-16, whereas our export earnings were only Rs 170,946 crores during 2015-16 .

The fuel minerals have a greater share in production, whereas metallic and non metallic minerals have a lesser share, value wise. Chhattisgarh, Jharkhand, Odisha and Rajasthan lead  in mineral production in the country. In world resources rankings, we are among the top ten countries in respect of coal, iron ore, manganese, aluminium ore, chromium , zinc and magnesium ore.  The expenditure in mineral exploration by India is US $ 17 per square km , whereas it is $ 124 and $ 118 in respect of Australia and Canada. This needs to be increased substantially. Of India’s entire Obvious Geological Potential (OGP) area of 0.57 million sq. km, identified by GSI, only 10% has been explored and mining is taking place in 1.5 – 2% of this area.

The reform measures needed are more transparency, effective solutions to social problems and tribal issues, addressing infrastructure development of mining areas and achieving uniformity in the lease period which is now fixed at 50 years. The scope for deep seated mining and offshore mining are tremendous, which are expected to meet our future requirements.

Five star rating for mining companies has become compulsory, which ensures their compliance with environmental, safety and labour friendly laws. Illegal mining is firmly dealt with in the new Mines and Minerals (Development and Regulation) Act of 2015 (MMDR Act). This Act also provides security of tenure, grant of prospecting and mining licences, transferability of lease  and foreign direct investment (FDI)  in the mining and exploration sectors.

The MMDR Act 2015 has created transparency in grant of leases through auctions. The auctioned blocks have generated Rs 220,000 crores of revenue, of which Rs 181,000 crores has been collected. The new National Mineral Exploration Trust Fund (NMET) collected on the basis of this Act is now valued Rs 1400 crores, that is expected to be used for exploration purposes. The District Mineral Funds generated Rs 21,000 crores through the cess, that has enriched mining districts and are to be used for the respective district’s welfare.

The minor mineral list has been enhanced to include 31 minerals, that has made it easier for state governments to issue mining lease licences. The export duty on iron ore has been reduced from 10 and 30 % to 0 % for ores with less than 58 % iron content.

A new national mineral policy is under finalization which is expected to have special courts to try mining offences and impose penalties.

Industrial growth and GDP are linked to the mining sector’s growth. Land acquisition is still a grey area and the FDI inflows obtained are low and not as per the expectations.

The mining sector has witnessed major reforms during the last five years and more is expected in the coming years.

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