Overview on Sector, Size and Growth:
For any nation, Minerals constitute the back-bone for economic growth and India has been eminently and enormously endowed with this gift of nature. Indian Mining Industry has been a major mineral producer in Asia and globally. Currently it is the global producer of chromite, coal, iron ore and bauxite while enjoying economic growth during the nineties. Mining is over 6000 years old in India. Since the initiation of National Mineral Policy in 1993, India has made good progress in attracting foreign investment in its mining sector, along with attractive incentives. The National Mineral Policy was revised again in 1994 and as a result, private investment (both domestic and foreign), has been permitted for the exploration and exploitation of the following minerals: Iron – ore, Copper, Manganese, Lead, Chrome ore, Zinc, Sulphur, Molybdenum, Gold, Tungsten ore, Diamond, Nickel and Platinum group of metals.
India is the 3rd, 4th, 7th and 3rd largest producer of coal, iron ore, bauxite and steel respectively fir the financial year 2017-18. Rise in infrastructure development and automotive production are driving growth in the sector. Power and cement industries are also aiding growth in the metals and mining sector. Demand for iron and steel is set to continue, given the strong growth expectations for the residential and commercial building industry.
The mining sector has shown significant growth since 1955. The value of mineral production reached the level of Rs. 282966 crores in 2015-16 from Rs. 91 crores in 1955. This was mainly due to significant achievements made in the production of fuel, metallic & non-metallic minerals. The value of fuel minerals increased from Rs. 59 crores in 1955 to Rs. 189712 crores in 2015-16. Similarly, the value of metallic minerals rose from Rs. 25 crores to Rs. 33469 crore and that of non-metallic minerals including minor minerals from Rs. 7 crores to Rs. 59785 crores during the same period.
Mining Products in India:
Indian Mining Industry produces many products which include a total of 84 minerals consisting of, 49 non-metallic industrial minerals, 11 metallic minerals, 4 fuels and 20 minor minerals. The products are like molybdenum, nickel, oil sands, palladium, Aluminium, coal, cobalt, copper, chromium, tantalum, tin, titanium, diamond, gold, iron ore, lead, manganese, platinum, silver, vanadium, tungsten, uranium, zinc, etc
Foreign direct investment:
- The government offers a wide range of concessions to investors in India, engaged in mining activity.
- Mining in specified backward districts is eligible for a complete tax holiday for a period of 5 years from commencement of production and a 30 percent tax holiday for 5 years thereafter.
- Export profits from specified minerals and ores are eligible for certain concessions under the Income tax Act.
- Minerals in their finished form exempt from excise duty.
- World’s largest producer of mica; third largest producer of coal and lignite & barytes; ranks among the top producers of iron ore, bauxite, manganese ore and aluminium.
- Labours availability.
- Low labour and conversion costs
- Huge quantity of best quality reserves
- Exports to others countries like china, japan, etc.,
- Poor infrastructure facilities
- Mining technology is outdated
- Low innovation capabilities
- Lack of R&D programs and training and development
- The Indian mining industry suffers from an out-dated, unattractive approach to mining education that is partly to blame for insufficient human resources.
- High rate of illegal mining
- Mining operations are not environment friendly. Least importance is given to environment concerns.
- India has an estimated 85 billion tonnes of mineral reserves remaining to be exploited.
- Focusing on technology for future and India’s numerous technology research institutes are working on energy related R&D.
- While India has 7.5% of the world’s total bauxite deposits, aluminium production capacity is only 3% of world capacity, indicating the scope and need for new capacities
- Considerable potential exists for setting up manufacturing units for value added products.
- India welcomes joint ventures between foreign and domestic partners to mobilise finances and technology and secure access to global markets.
- Mining companies and equipment suppliers are under the constant threat of being taken over by foreign companies.
- A heavy tax burden discourages further investment.
- Politicians undervalue the industry’s contributions to the economy.
Lease of Mines:
Scope of Advantage:
- 100 per cent FDI allowed in the mining sector and exploration of metal and non-metal ores.
- Strategic location enables convenient exports to developed as well as the fast-developing Asian markets
- Demand for iron and steel is set to continue, given the strong growth expectations for the residential and commercial building industry.
- Significant scope for new mining capacities in iron ore, bauxite and coal.
- Power and cement industries also aiding growth in the metals and mining sector.
Exports and Imports:
Indian Mining Industry is classified under the category of “Red” for pollution which represents highly polluting industries.