The majority of India's output is coal, accounting for 80%
of total mining, while other groups of minerals make up the
remaining 20%.
India is the largest global producer of mica blocks and mica
splitting. The country also ranks second in the world for its
production of barites and chromite; third in the production of
coal and lignite; fourth in iron ore and bauxite; fifth in the
manganese ore and crude steel production; and seventh in
worldwide aluminium output.
Iron-ore, copper-ore, chromite, zinc
concentrates, gold, manganese ore,
bauxite, lead concentrates and
silver account for the entirety
of metallic production, while limestone,
magnesite, dolomite, barites, kaolin,
gypsum, apatite, phosphorene, steatite
and fluorite account for 92% of
non-metallic minerals.
The contribution of mining to India’s GDP has
declined from 3.4% in 1992-93 to 2.2% in fiscal year 2015-2016.
Aside from the global headwinds all countries are facing
post 2008, the Indian mining industry is also facing several
challenges domestically in terms of toughening regulation, a
weak and inadequate monitoring system, long clearance times for
licences and permits, limited infrastructure and logistics and
insufficient geophysical and geochemical data on mineral
resources.
According to the Indian Mineral Federation, only about 13%
of India’s 575,000 square kilometres of land with
geological potential has been explored in detail, while the
remaining areas and reserves offering untapped opportunities
remain unexplored.
The reserves-to-production (r/p) ratio of various minerals
in India remains low, reflecting significant unexploited
opportunities in the country. Bauxite for example had an r/p
ratio of only 21% with production of 15.36m tonnes against
proven reserves of 321.26m tonnes in 2013, according to the
2013-2014 annual report published by the Ministry of Mines.
Another unexplored mining segment is the heavy mineral
industry of India as regulatory changes, continuing illegal
mining practices and confusion over the categorisation of
minerals under atomic or beach sand minerals has kept further
exploration and investment at bay. The minerals in question
include ilmenite, rutile, zircon, garnet, monazite and
sillimanite.
Atomic minerals are considered a source of energy, which can
provide a substitute for fossil fuels and hydro-electricity,
while the term is largely used in India to classify minerals
under Part B of the First Schedule of the Mining and Mineral
Regulation Development (MMDR) Act.
India's metallic mineral production,
2012-13, m tonnes
|
Iron ore
|
136,000
|
Bauxite
|
15,360
|
Lead and zinc ore concentrates
|
8,580
|
Copper ore and concentrates
|
3,640
|
Chromite
|
2,950
|
Manganese ore
|
2,320
|
Gold
|
470
|
|
Source: Indian Bureau of Mines
|
India's non-metallic
mineral production,
2012-13
|
Limestone
|
280,000
|
Dolomite
|
6,713
|
Silica sand
|
3,690
|
Kaolin
|
3,679
|
Gypsum
|
3,538
|
Phosphorite
|
2,124
|
Barytes
|
1,739
|
Steatite
|
939
|
Fireclay
|
817
|
Magnesite
|
213
|
Sillimanite
|
43
|
|
Source: Indian Bureau
of Mines
|
India's heavy mineral reserves
|
Mineral
|
Million tonnes
|
% global reserves
|
Ilmenite
|
593
|
35
|
Silimanite
|
226
|
NA
|
Garnet
|
168
|
40
|
Zircon
|
34
|
14
|
Monazite
|
12
|
71
|
Rutile
|
31
|
10
|
|
Source: VV Minerals
|
Unlocked potential of the heavy minerals
industry
With over 30% of global heavy minerals reserves, India
accounts for just 4% of the world’s total
production. The industry has faced tough competition from low
cost Chinese imports, toughening regulations and a lack of
investor-friendly policies, making it a difficult territory for
further exploration.
The minerals are largely found in five states; Tamil Nadu,
Kerala, Andhra Pradesh, Odisha and Maharashtra, with only six
companies in the sector, including Indian Rare Earths Limited
(IREL), a public sector undertaking.
However, it takes about seven or eight years to secure a
lease for mining in beach sand deposits and separation of heavy
minerals, followed by the need to obtain clearances from the
Department of Atomic Energy and to secure a no objection
certificate for mining in the Coastal Regulatory Zone (CRZ)
from various authorities.
This has deterred foreign direct investment, in addition to
the absence of export incentives and anti-dumping duties on
heavy minerals, which is mandatory for the further expansion of
the country’s heavy mineral industry.
Vaikundarajan Subramanian, managing partner of beach sand
mining company VV Minerals, told IM that, in
order to attract foreign direct investment and develop proper
infrastructure for India’s mining sector, the
government should reclassify beach sand minerals as
non-atomic.
There should be a set of clearly framed separate rules for
atomic minerals, he said, while beach sands should be promoted
to private enterprises for the purpose of bringing in the
latest mining technology, boosting domestic employment and
increasing the amount of royalties payable to the
government.
While the government has proposed adjusting mining rules for
atomic minerals on the basis of pre-determined radioactive
threshold, concession period and leasehold area, allowing
limited leeway to provincial governments under the new
regulations, how soon this is likely to boost the industry
remains in question.
India’s Heavy Mineral Reserves
vs. Production
|
|
Source: Indian Bureau of Mines
|
Monazite: Unmapped rare earth
India is a large producer of rare earths with an annual
output of 2,800 tonnes. However, with its estimated reserves of
over 3m tonnes rare earths, the country has the potential to be
self-sufficient in an industry presently dominated by China,
which boasts a 105,000 tonne production capacity.
Monazite is the largest present rare earth element in India,
estimated at 11.39m tonnes.
Between the years 2009-2014, India produced only 310.14m
tonnes rare earth elements and sold 285.9m tonnes of the
material, while in the year 2014-2015 it just sold 4.2m tonnes
domestically.
The government has taken the initiative to auction one of
its rare earth blocks in the Barmer desert of Rajasthan and has
worked to regulate the mining policy to encourage exploration.
VV Minerals’ Vaikundarajan told
IM that at current production levels, the
Indian heavy minerals industry has the potential to produce
30,000 tpa monazite with 15,000 tpa rare earth elements. If
ilmenite production levels increase to 25% of the
world’s total, the industry will be able to offer
1.8m tonnes monazite and 90,000 tpa rare earth
elements.
IREL has also set up a 10,000 tpa monazite processing plant
at its unit in Odisha to produce about 26 tpa nuclear grade
ammonium di-uranate. It has additionally modified its
facilities at Aluva, Kerala to
process about 5,000 tpa mixed rare earth chloride and to
produce separated high purity rare earths.
Nevertheless, India aims to accelerate its production to
counter China’s monopoly in the market and supply
of rare earths to Tokyo, following its deal with Japan in
2010.
Other underdeveloped minerals
Graphite
With reserves of nearly 11m tonnes, India has been ranked as
a major global producer of flake graphite, having deposits in
different states including Jammu and Kashmir, Arunachal
Pradesh, Gujarat, Jharkhand, Maharashtra, Karnataka, Kerala,
Tamil Nadu, Odisha, Chattisgarh and Rajasthan.
However, only 15% of these reserves are commercially
exploited in the states of Jharkhand, Odisha and Tamil Nadu
where they are mined and processed, while the deposits of
economic importance located in Andhra Pradesh, Chattisgarh and
Arunachal Pradesh remain unexplored.
The country’s graphite production has been
showing a downwards trend with the total flake graphite
production for 2015 reported at only 18,000 tonnes, according
to IM’s Natural
Graphite Report: Strategic Outlook to 2020.
This has turned India into a net importer of natural
graphite with end consumers seeking to secure low-cost material
from China. Trade statistics show that Indian imports of
natural graphite have leapt 123% in last five years, from
12,400 tonnes in 2010 to 29,300 tonnes in 2015.
Consequently, refractory imports have been growing, making
India the largest importer of Chinese refractory products,
which have increased by 990% in the last ten years.
States with maximum Monazite reserves
(million tonnes)
|
|
Source: Indian Bureau of Mines
|
Fluorspar
A similar scenario currently prevails in
India’s fluorspar space, with domestic production
reported under 3,000 tpa of low grade material from the captive
mine owned by Gujarat Mineral Development Corp.
This is despite the country having mineral resources of
18.2m tonnes and domestic consumption of over 200,000 tpa.
Currently, the leading suppliers to India are China, South
Africa and Thailand.
However, to ensure a stable supply of fluorspar to
India’s downstream industries, Navin, Gujurat
Fluorochemicals, and Gujurat Mineral Development Corp. have
formed a joint venture (JV) to develop fluorspar mines and an
associated flotation plant. The new project is expected to come
online within the next two or three years.
Barite
Most of India’s barite (barytes) mines in
Mangampet, southern India, are nationalised and controlled by
Andhra Pradesh Minerals Development Corp. (APMDC), a
public-sector unit of the Andhra Pradesh government.
Thus APMDC owns the bulk of India’s barite
reserves and accounts for 98% of output. Every year, APMDC
holds two tenders: one for bids to mine the barite, the other
for bids to sell the material.
In April 2015, APMDC issued a new tender for the sale of
600,000 tpa drilling grade 4.20 specific gravity (SG)
'A-Grade’ material and drilling grade 4.10 SG
'B-grade’ barites from Mangampet in the Kadepa
district of India.
Despite inviting bids from domestic and international
exporters, APMDC has been struggling to sell material to
regular markets as it fails to compete with Chinese and
Moroccan supplies.
According to Indian exporters, amid slowing demand it has
become difficult to compete against the low-cost material
available elsewhere, with the industry fearing the loss of
major consuming Middle Eastern markets, one of the largest
buyers of drilling grade barite from the country.
Nevertheless, India remains largely self-sufficient in most
of the primary mineral raw material to meet the increasing
demand of its growing industrial consumption.
Despite a high degree of self-sufficiency, some minerals,
including flake and amorphous graphite of high-carbon content,
kaolin and ball clay for special applications, very low-silica
limestone and dead-burned (DBM) magnesite are imported to meet
demand.
Issues and challenges facing the mining
sector
Plagued by poor regulation
Regulatory loopholes in the mining sector mean that mining
companies have been known to carry out illegal practices.
Although the government has taken several measures to regulate
the domestic mining sector by introducing changes through the
Mines and Minerals (Development & Regulation) Act, 2015,
there is still a long way to go.
Inadequate data
Limited geophysical and geochemical data is available
regarding India’s mineral resources with
insufficient information causing opaqueness in the sector.
Inadequate communication is leading to confusion and
misinterpretation by miners and governing bodies.
Low investment and exploration
The exploration of new minerals, particularly deep-seated
strategic minerals, the development of new technology and the
implementation of the best mining practices are critically
neglected areas in the country’s mining policy and
investment budget.
Abandoned mines
The number of abandoned mines is very high in India. Over
the last decade, efforts have been made to strengthen
regulations pertaining to mine rehabilitation and closures, but
the situation is still far from satisfactory.
Lengthy clearance windows
For obtaining environmental clearance and other different
licences, it takes 12-24 months in India, delaying projects.
This not only hampers further expansion in the mining sector
but also works to keep potential investors away. In India it
takes over four years to get a mining lease, compared with less
than a year for other major mining countries such as Brazil,
Chile, the US and Canada.
Self-sufficiency in minerals and
metals
|
Commodity
|
Domestic consumption ('000 tonnes)
|
Supply
('000 tonnes)
|
Order of self-sufficiency (%)
|
Minerals
|
|
|
|
Barytes
|
186
|
1739
|
100
|
Bauxite
|
11019
|
15360
|
100
|
Chromite
|
2602
|
2950
|
100
|
Dolomite
|
6805
|
6713
|
99
|
Feldspar
|
465
|
1291
|
100
|
Fireclay
|
480
|
817
|
100
|
Fluorite
|
63
|
3
|
5
|
Gypsum
|
8667
|
10082
|
100
|
Ilmenite
|
191
|
738
|
100
|
Iron ore
|
103399
|
136019
|
100
|
Kyanite
|
3
|
1
|
33
|
Limestone & other calcareous
minerals
|
259314
|
279977
|
100
|
Magnesite
|
490
|
213
|
44
|
Manganese ore
|
4177
|
2322
|
56
|
Rock phosphate (including apatite)
|
4221
|
2125
|
50
|
Rutile
|
26
|
16
|
62
|
Sillimanite
|
20
|
44
|
100
|
Silica minerals
|
2285
|
5096
|
100
|
Sulphur
|
1816
|
928
|
51
|
Talc/steatite/pyrophyllite
|
368
|
1184
|
100
|
Metals
|
|
|
|
Aluminium
|
2435
|
1675
|
69
|
Copper (refined)
|
438
|
493
|
100
|
Lead (primary)
|
248
|
118
|
48
|
Zinc
|
649
|
704
|
100
|
Ferro-alloys
|
|
|
|
Ferro-chrome
|
287
|
944
|
100
|
Ferro-manganese
|
124
|
518
|
100
|
Ferro-silicon
|
42
|
90
|
100
|
|
Source: Ministry of Mines
|
The outlook for India
India holds significant potential to further grow its mining
industry. According to the Confederation of Indian Industry,
the country’s growth is expected to be at 8% for
the fiscal year 2016-2017. This resurgence in domestic economic
growth will increase domestic consumption of metals and
minerals. In 2014, India’s per capita consumption
of total finished steel stood at 59kg compared to the world
per-capita consumption of 217kg, leaving it room to grow,
driven by investment in the construction markets.
Despite facing a "tough" 2016 amid weak global markets,
major steps were taken by the government in 2015 to revive the
industry including passage of the Mines and Minerals
(Development & Regulation) Act and initiating the process
for starting auction of mines bearing minerals such as iron
ore, bauxite and limestone.
The National Mineral Exploration Trust (NMET) was also asked
by the government to encourage mineral exploration by working
on various rules and guidelines to help improve the ease of
doing business for miners.
Another major initiative to curb illegal mining was
undertaken via a partnership with the Indian Space Research
Organisation (ISRO) for satellite surveillance of mineral
blocks. Under the partnership, the ISRO will take satellite
images of mines and update the Ministry of Mines
fortnightly.
This is likely to curb ongoing illegal mining operations in
the country, resulting in the suspension of several mines in
major producing states of Karnataka, Odisha, Jharkhand and
Goa.
In order for there to be a sustainable growth pattern in
mining, the management of mineral resources has to be closely
integrated with the overall mineral development and
exploitation strategy, guided by long-term national goals and
perspectives.