Mining sector poised to scale new heights
B B Tandon
India being the home of a very ancient civilization, has a rich heritage of mining and metallurgy dating back to the pre-Harrapan period (4000-2000 BC). India was the only source of diamond for the world for over 3000 years and has a heritage of world's oldest zinc technology besides extensive and deep workings of copper-lead-zinc etc.Mining is one of the core industry in the development of a country. The mining industry in India registered a rapid growth since 1947, growing from a production of 20 minerals valued at Rs 70 crore in 1950 to 84 minerals valued at about Rs 33,075 crore in 1996-97. At present, the country a produces fuel minerls, 11 metallic minerls, 49 non-metallic minerals and 20 minor minerals. The share of the mineral setor in the gross domestic product (GDP) of the country is around 3.5 per cent while accounting for 10 per cent share in the index of industrial production. Though 80 per cent of the mines are in the private sector, yet 91 per cent of the production in terms of size
comes from the government-owned mining ventures. Mining employs over 8,00,000 persons. India is a leading producer of iron ore, chromite, manganese ore, barytes, titanium, soap-stone and is largest producer of block mica in the world. The country exports many ores, minerals, metals and alloys. The centre is committed to increasing output from the mineral sector. Although a number of mineral deposits have been exhausted, India still has a large quantity of known mineral occurrences. There is also an excellent potential to find new deposits. The country has well established mineral exploration infrastructure. The Geological Survey of India, Mineral Exploration Corporation and directorates of geology and mines of various state governments are the main agencies engaged in mineral exploration. As a result of detailed exploration carried out by these agencies, huge resources of iron ore, chromite, bauxite, manganese ore, coal and a host of industrial minerals have been identified. However, new deposits of
high value minerals like gold, diamond and base metals are yet to be discovered and there is an urgent need for the deployment of private capital in exploration and development of private capital in exploration and development of these mineral resources. Remote sensing aided exploration has added a new dimensions to the exploration efforts in recent years. With the structural reforms initiated by the government in 1991, a new era was ushered in, when the new National Mineral Policy was announced in March, 1993 and the mining sector was thrown open to the private initiative and investment. The new policy has dispensed with the exclusive/predominant role of the state for exploration and exploitation of 13 minerals of basic and strategic nature such as iron ore, manganese ore, chromite, gold diamond, copper, lead, zinc, sulphur, molybdenum, nickel, tungsten and platinum group of metals and the mineral sector has been thrown open for private investment, both domestic and foreign. This new policy allows
induction for foreign participation in exploration and mining for high-value and scarce minerals. While foreign investment in equity would normally be limited to 50 per cent enhanced equity holding can also be allowed on case to case basis. The guidelines for aerial prospecting over large areas were issued in October, 1996, which permit grant of prospecting licence for area upto 5,000 square kilometres for a single prospecting licence and 10,000 square kilometres for a single company in the country subject to a scheme of relinquishment and achievement of physical/financial targets over a period of 3 years. The response has been encouraging and a number of applications have been received by the state governments from large investors for grant of such prospecting licenses over large areas. The government has already granted approval in 21 such cases involving some of the major international mining companies. In January, 1997 the automatic route for foreign equity participation upto 50 per cent in mining
for certain minerals and foreign equity participatioon upto 74 per cent in services incidental to mining of certain minerals was also notified. About 3 dozen proposals of different companies involving an initial investment of more than Rs 2500 crore have been approved by the FIPB. Availability of basic geological and exploration data, institutional framework, highly qualified scientists, technicians and skilled manpower at relatively low cost, sound legal framework, well established markets to absorb mineral based products are some of the unique features in India which should attract foreign investment. While the country has performed fairly well in the field of conventional mineral exploration, we have lagged behind in developing our resources to optimum capacity. As a result a number of low grade deposits are currently being considered commercially non-viable even though many of them are exploitable as per global standards. Some examples of available opportunities for fresh investment in the mineral
sector include. Development of known deposits of economic and marginal categories awaiting exploitation such as base metal deposits. Concept oriented regional scanning in known matelogenic provinces. Search for mineral commodities. Cluster mining of small deposits of gold. Encouraged by the government's new economic policies, private sector enterprises in India have plans to modernize, expand and diversify. The initiative of the private sector, both Indian and foreign and support of the government would usher a rapid economic development and sustained economic growth. Thus India is fully geared up to provide to potential entrepreneurs the challenging opportunities in the 21st Century in exploring and exploiting the mineral wealth consistent with objectives of growth and in harmony with the environment. (The author is the secretary in the ministry of mines)
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
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