mining business plan in india

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How To Start A Mining Business In India (And Small Business Opportunities)

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Are you looking for a new business opportunity? Then you can think about starting a mining company. According To InvestIndia , The mining industry in India was valued at $41.7 billion in 2014-15 and is estimated to reach $125 billion by 2025. Moreover, Mining contributes significantly to the Indian economy.

It usually requires extensive capital to start a mining company anywhere in the world and so it is in India, but you can receive amazing rewards from it at the end of the day. Also, there are many small businesses in the mining industry, which require fewer resources and capital. We will be focusing on them as well.

Small Business Opportunities

According to Wikipedia, Mining carried out on small scale contributes 6% to the entire cost of mineral production in India. Also, The Indian mining industry which ranges from large scale mineral drilling businesses to small scale equipment leasing businesses provides jobs to around 7 lakh individuals. Starting a mining business doesn’t necessarily mean that you should acquire a mineral mining region such as a quartz mine in Rajasthan. However, you will be able to provide a range of other services to small and large mining industries, which are essential for mining.

There are small to medium scale services and businesses in the mining industry, which require less capital and resources to be profitably functional and can help mining industries. Some of them are:

A) Equipment Based Services

• Equipment Sales: Mining requires lots of different types of tools and machinery. By dealing in equipment sales, you can choose the type of equipments or machinery you want to trade and build a business around it.
• Equipment Leasing Services: If you want to set up equipment based business on a small to medium scale, you can set up equipment leasing services.
• Equipment Repairing Services: To start this type of business, you require much less capital and resources. You would mostly need highly skilled labor to start equipment repairing services.

B) Transportation Services

• Logistic Services: Transporting minerals from mining sites is a huge challenge for any mining company. The mined minerals are loaded in huge trucks, rails or ships from the remote mining sites and sent to the industry for processing. You can start a transportation service to help mining industries with mineral transportation. At UCM LLP, we use local transportation services for transporting quartz from different mines to our industrial plant in Kishangarh.
• Labor Transportation Services: Mining companies need to work in remote areas such as ocean beds, deserts or forests. Labors and staff are required to be transported to such remote areas via helicopters, boats or ships. You can think of providing offshore transportation services.

C) Drilling Services

• Borehole Drilling Services: Sometimes Boreholes are drilled in order to mine the minerals. In such cases, high-pressure water jets are used to extract the minerals. By specializing in Borehole Drilling services, you can help the mining companies with mining through hydraulic channels.
• Mineral Exploration Services: Exploration is a popular niche in the mining industry. Mineral Explorers help the mining industries in locating mineral rich areas.

D) Consulting Business

• Recruitment Consultants: It is difficult to find the right employees for the mining industry and the traditional recruitment agencies usually can not help in recruiting specialized labors or staff for the mining industry. Hence you can open your own Mining Recruitment Consultancy.
• Financial Consulting: Financial consultants help the mining industry is seeking the right mining opportunities and earning a profit in the long term. They have financial consultants and analyzers who help the mining company in cost-effective and profitable mining.
• Project Consulting: Mining is carried out in different areas and changing the locations often can be daunting for the miners. In such cases, the company often takes help of mining consultants who help with the A-Z of the mining project and provide different information such as geological information, mineral information, exploration information and other information which is essential for mining minerals effectively.

E) Technological Services

• Software Development & Maintenance
• Equipment Testing
• Data Mining

F) Other Services

• Waste Management Services
• Medical Services
• Risk Assessment Services
• Power Supply
• Temporary Development
• Security And Safety

Mining companies are in need of these services to move forward with their business operations. Therefore, you will be able to offer them one or many of these services and make a decent amount of money. Since the mining companies don’t hesitate before they go ahead with massive financial transactions, you need to make sure that you document everything legally.

What is needed to start a mining company?

You should do heavy research before you start a mining business. During the research, you will need to speak to the right people and gather all the information needed to start business operations.

If you are thinking about drilling and manufacturing minerals, You should initially learn how to register your mining business . Then you will need to focus on how to supply and export the mined products in the local market. The export of minerals is generally essential for any minerals manufacturing industry. That’s where you need to take a look at the export license and the regulations associated with it. Export licenses are not too difficult to acquire if you are exporting mineral products because any government and likewise the Indian government usually encourages the export of most minerals because of an increase of foreign currency in the domestic government reserves.

At Unique Crystal Minerals LLP, a large scale quartz manufacturer in Rajasthan , We have been exporting quartz globally for the last many years, and we have not faced any major difficulties with Indian government norms or regulations. We are also proud to be one of the largest quartz exporters in India .

If you are not looking forward to drilling for the mineral directly, you can get in touch with mining companies and ask for the issues that they face. Then you will be able to provide the previously listed services, which mining companies can use to overcome the problems.

Mining Equipment

Once you decide to go ahead with mining, you should purchase appropriate mining equipment. This is where you should think about getting the best quality industrial pumps, drills and construction vehicles. At Unique Crystal Minerals LLP, we use most of the vehicles from JCB. We also rent some of the machinery to reduce expenses. These aren’t all the tools. You can get in touch with a professional service provider and figure out what tools you need. You can also learn more about them from the research you do. However, you must also make sure that you don’t go over your budget at the time of purchasing tools.

Hiring Employees

Once you purchase tools, you need to hire skilled employees to work for your mining company. You will need to hire a lot of people due to the nature of the work that you have to do. A lot of employees will be working for a manual labor job, who can assist you mine materials. However, you will also come across the need to hire experienced employees.

After hiring employees, you will have to provide them with accommodation near the mining site. You can find accommodation or build accommodation for them in a nearby town. In addition to that, you will also need to develop an office, where you can manage all administrative work.

Health And Safety

You should understand what health and safety measures you need to practice before you start the mining business. You should also provide appropriate training to all employees on how to use the tools and how to ensure their own safety.

How to make profits from the mining business?

Now you are all set to go ahead with your mining business. This is where you should understand how to make profits out of your business. There is a high possibility for you to make profits out of your business because you will be spending a relatively little amount of money on mining the minerals needed. You just need to mine minerals and sell them in the market at a higher price tag.

To maximize profits, you can figure out what the high demand minerals available for you to mine are. Then you will be able to receive higher profits out of what you sell. Minerals that generate higher profits are changing along with time as well. Therefore, you need to make sure that you have an up to date knowledge about them.

You will also have to come across a lot of challenges when you are managing the mining business. If you can strategically plan to overcome those challenges, the mining company you create can provide you with rewarding results at the end of the day.

Mining Challenges

There are many problems that you may face while starting a mineral mining business. From extensive capital to fluctuating mineral prices and from resource nationalism to frequently changing government policies, Drilling Minerals is definitely not for the weak-spirited person.

1) Initial Costs & Contacts

The costs required to set up a mineral mining business is quite high. You would need heavy capital for purchasing or leasing different equipment, hiring experienced labor, build relevant infrastructures such as processing plants, energy plants, and transportation models. In India, it’s very difficult to acquire mining licenses without contacts at different government levels.

2) Skilled Labour & Staff

Mining business requires highly skilled labor and staff to operate efficiently. Also, many people are not willing to work at mines or remote areas due to health hazards, accidental risks and low quality of life.

3) Fluctuating Mineral Prices

Mineral prices depend on different factors such as demand and supply, the cost of production, the global economy, etc. Varying mineral prices may make it difficult to always trade the minerals profitably.

Water is important for mining minerals at several sites. Such mining is usually carried out through hydraulic channels. Lack of water and implausibility of borehole drilling makes mining challenging in several areas in India.

5) Power Supply

It requires a huge amount of power supply to power the mining equipment. Lack of power supply in certain mining areas makes it difficult to mine minerals.

6) Government Regulations

With changing government policies, sometimes it gets really difficult to acquire a license to operate on a mine. Also, the government imposes certain rules and regulations for its own control of mines. This is popularly known as Resource Nationalism.

Some other challenges include

• Ensuring Worker safety and all legal procedures pertaining to them.
• Ensuring the waste is managed properly and the surrounding environment has not been harmed.

Starting a mineral mining business in India or anywhere in the world is interesting but quite challenging at the same time. Although if you are interested to start a business in this field, you can look at smaller business opportunities as well. If you are not well acquainted with the mining industry, you can start by providing smaller services required for the mining industry and then, later on, switch to drilling and mining minerals. You can contact me personally if you are interested in setting up a quartz manufacturing business in Rajasthan or nearby areas.

Author:  Dinesh Agarwal

Dinesh Agarwal is the founder chairman of Unique Crystal Minerals LLP. He is working in the minerals industry for more than a decade now and is widely known in the Inidan state of Rajasthan for his industrial expertise.

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sir i want to gain knowledge in this industry . i want to do startup in my village . and there is already so many concrete mining so i also want to open a mining field and i don’t have any knowledge in this field so what to do can you help me out sir

Hello Faiz,

Please contact me at 9414206679

sir i want to start mining business in India, i am already working for mining company, what are the formalities to get into business

That was a beautiful description of the entirety of mining industry. I would like to know what I as a geology graduate can find easy, as compared to other guys from different backgrounds, willing to start this business. I s there any advantage a geology student can avail?

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Rising energy demands and infrastructure expansion are compelling mining companies to boost productivity with a focus on safety. Automation – key to operational excellence – could help achieve this objective. Yogesh Daruka and Ankur Basu make a strong case for the automation imperative in the domestic mining sector.

Features of an automated mining truck *

Click on the dots to explore further

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Front video camera

Radio detection and ranging (radar), ultrasonic sensor, back video camera, light detection and ranging (lidar), global positioning system (gps).

Tracks the location of a vehicle by receiving signals from orbiting satellites. It is also useful for allowing an autonomous vehicle to choose the most direct route from one location to another.

Gives drivers better visibility to navigate tight roadways and avoid collisions, besides recording real-time video footage to provide a complete view of incidents and service data.

Monitors terrain conditions underground, detects potential hazards such as rocks and voids, and maps other subsurface structures.

Enables precise distance measurement, detects obstacles, and monitors wall stability in underground mines. These sensors optimise operations and reduce chances of accidents by providing real-time data in challenging mining environments.

Offers a reliable rear view of the surroundings, thus making parking, towing and reversing or navigating in congested areas easier.

Light detection and ranging (LiDAR)

Measures distances by emitting laser lights towards a point and analyses the reflected light. LiDAR systems can emit multiple lasers. When combined with rapidly rotating mirrors, they can generate three-dimensional models of their environment.

The mining industry in India has transitioned from manual to mechanised operations, with technology and automation adoption at different levels of maturity. Regulatory reforms and the opening up of new blocks through auctioning have also caused India’s mining industry, known to produce as many as 95 minerals, to gain significant momentum.

The aspiration to achieve a USD 5 trillion economy 1  and self-reliance in the energy sector have driven investors to take a relook at India’s mining landscape as a promising avenue that can contribute significantly to the nation’s economic and industrial advancement.

With an increase in energy demand and infrastructural growth, pressure is now mounting on mining companies to enhance their production and capacity with a focus on safety and enhanced efficiency. The business model too is evolving to factor in operational cost-effectiveness and benefit stakeholders across the spectrum. This in turn could lead to the empowerment of local communities by enhancing their livelihood options.

PwC’s analysis reveals that deployment of the autonomous mining equipment in open-pit mines has grown significantly in the last two decades in both developed and emerging markets. Additionally, the adoption of such technology cuts across the mining of commodities such as iron ore, gold, copper and coal. In 2007, only 18 autonomous haulage system (AHS) trucks were in use. Sixteen years on, 1,234 such autonomous vehicles are in operation around the globe. 2   Indian mines, however, are yet to leverage this technology.

What has kept the mining sector in India from embracing automation wholeheartedly? What are the opportunities that automation presents? This article attempts to answer these questions and offers recommendations to power India’s domestic mining enterprise.

Autonomous technology in mining

Safe mining operations combined with peak capacity production entails automation. Autonomous mining operations involve two types of technologies – operational technology and information technology. Operational technologies encompassing mining equipment and equipment control systems help achieve automation, while information technology involves communication and transfer of data for analytics and decision-making.

As for the levels of automation, mining operations could be:

• Semi-independent
• Independent

The first level of autonomy refers to labour-intensive operations that require continuous efforts from the operator. In this level of autonomy, all heavy earth moving machinery (HEMMs) are manually operated. The second level of autonomy refers to the conditions in which the system performs a portion of the tasks independently within a defined set of logic while the rest is controlled by the operator. Manual intervention is necessary in the second level, to some extent. The third level of autonomy refers to completely autonomous operations and does not require any manual intervention. In this case, the HEMMs are able to analyse the situation, make decisions, navigate, and perform the desired operation.

After analysing the maturity level of the current mining operations, a guided approach is needed to introduce automation in different aspects of the mining process. Given below is a snippet of the levels of autonomy achieved in various aspects of a mining operation.

• Autonomous drilling
• Autonomous blasting
• Autonomous loading
• Autonomous hauling
• Autonomous support equipment

This involves automation of the drilling process, which includes precision drilling without human intervention and capturing the rock mass data while drilling to create a drill face profile.

The achievable level of autonomy in this process, at present, is semi-independent as the initiating system is handled manually. The loading of explosives into each blast hole can be automated so that the charging operations can be directly controlled by the loading plan created in the system and the charging truck automatically loads the exact amount of explosive as per the plan, based on the inputs received while drilling the hole.

This process includes interaction of the bucket of the excavator with the rock during which the machine applies multiple forces for excavation and material handling. The loading process is still in semi-independent level of autonomy with some major original equipment manufacturers (OEMs) promoting the teleoperations for the excavators and loaders.

This includes transportation of materials through autonomous haul trucks. These trucks perform the entire hauling cycle autonomously. Mines in many countries across the globe have achieved complete autonomy in this aspect of mining.

This includes automation of support equipment which can be a challenging process. It requires a high level of decision-making capability as auxiliary activities can turn out to be complex and unpredictable due to which logic building becomes a challenge.

Global deployment trends in autonomous equipment

The mining sector embarked on its autonomous journey in the nineties as significant research and development (R&D) took place in trial applications. The first successful commercial deployment happened in 2007 in open-pit mine haul trucks. 3   Since then, technology has evolved significantly to become safer with the deployment of autonomous systems being expanded to both open-pit and underground mines. Moreover, these innovations are not confined to large trucks but include a wide range of equipment such as drills, dozers, load haul dump machines (LHDs) and low-profile dump trucks (LPDTs).

AHS deployment has grown four-fold in less than two decades

Our analysis reveals that the adoption of AHS trucks for open-pit mines has grown at a whopping compound annual growth rate (CAGR) rate of 328% between 2007 and 2023. 4

Figure 1: Cumulative growth of AHS trucks in open-pit mines

Source: PwC analysis Note: Data for some years are not available

Figure 2: Country-wise deployment of AHS trucks

Source: PwC analysis

The distribution pattern of autonomous trucks reveals that both developed and developing nations are gradually adopting technology to ensure safety and improve the efficiency and productivity of their operations. While Australia is the frontrunner in deploying the technology, other leading mineral-producing countries are following suit.

Automation is being adopted across commodities

While the first autonomous haulage trucks were deployed in iron ore operations, our research shows that over the years, the deployment of the technology has expanded to other commodities. 5   Figure 3 illustrates that the maximum number of AHS trucks are deployed in iron ore mining, but mining operations in coal, oil sand, copper and gold are catching up.

This development also indicates that the challenges related to mining operation methodologies, types of deposit and geometry of mining pits have been successfully mitigated during the planning and trial phases.

Figure 3: Commodity-wise distribution of AHS trucks

Figure 4: Distribution across the size of trucks

Technological advancements are allowing companies to customise technology-driven operations of trucks with lesser payloads whose use can be more cost-effective for new or small mining companies. Our analysis shows that retrofitting of technology is enabling small trucks (less than 100-tonne payload) to increasingly engage in mining. At least 13% of the trucks which are being used in mining today are large (100-20 tonne payload) trucks while ultra class trucks (those with a payload of over 200 tonnes) make up for 87% of the autonomous vehicles in use in mining. 6

Automation in other mining machinery is also on the upswing

While the deployment of autonomous trucks has grown significantly, drilling equipment has also seen considerable growth and adoption across the globe. Though the automation level for drilling can vary based on the on-site requirements, it can be broadly categorised into four types:

• remote control
• tele remote
• semi-autonomous, and
• autonomous.

Our analysis shows that the deployment of automated drills (considering varying levels of automation) in open-pit mines has grown at a CAGR of 74% since 2008. 7

Figure 5: Cumulative growth of automated drills in open-pit mines

Oceania is the frontrunner in deployment of automated drills followed by South America as seen in figure 6. Figure 7 illustrates that the use of automated drills is also being expanded to various commodities.

Figure 6: Distribution of drills across global regions

Figure 7: Distribution of drills across commodities

Source: PwC analysis 

While efforts are underway by OEMs to advance remote operations of primary mining equipment such as loaders, automation of mining equipment which is not directly involved in extraction of materials such as crushers, drills and haul trucks has provided flexibility in mining methods. For instance, dozer-assisted methods are increasingly being used in open-pit mining. Our analysis found that globally, at least 23 mines have semi-autonomous or autonomous dozers in operation. 8

While open-pit mining operations have been quick to adopt autonomous technology, underground mining operations are also making the transition to ensure worker safety and to overcome difficult geotechnical conditions. Though tele-remote operations are common in underground coal and metal mining, a few mining sites now have full autonomous control of equipment from the surface command centre.

Figure 8: Growth of automated/semi-automated dozer sites over years

New tech players are entering the market and innovating for smaller vehicles

Much of the R&D and trials that took place two decades ago included large or ultra class mining trucks and, for a long time, deployment was limited to these categories of vehicles. Increased automation adoption has benefited technology solution providers, opening up opportunities for new players to enter the market. Our analysis shows that the number of new technology providers has increased significantly over the last couple of years. These players are developing technological solutions that are not tied to a specific OEM which is critical for wider adoption in mining as companies use different classes of equipment from various manufacturers. While major OEMs have provided solutions which come with their equipment, new solution providers are offering retrofitted solutions embedded in different types of equipment.

Figure 9: Players in the autonomous technology market

Advancements in autonomous technology

Over the past few years, autonomous technology has gone through significant developments and advancements with the advent of Industry 4.0. The Fourth Industrial Revolution is expediting the R&D of autonomous vehicles by providing cutting-edge technologies like image processing, deep learning, decision support systems and also making the technology safer and cheaper. For example, lack of access to satellite-based global positioning data in underground environments led to challenges for the mining sector in terms of miners’ safety, material tracking and autonomous-truck deployment. Now an underground tunnel positioning system based on light detection and ranging (LiDAR) and underground positioning system (uGPS) can pinpoint the exact location of miners, drillers, surveyors and autonomous truck or robotic drills. 9

While the technology used in mining has advanced and new concepts are continuously evolving, the fundamental elements sit across four underpinning technologies:

• Communication technology: The current AHS mines rely entirely on wireless communication, which employs standard 802.11 Wi-Fi technology operating in the unlicensed spectrum. The flexibility offered by these technologies made Wi-Fi attractive for AHS solutions. Autonomous trucks, in particular, require continuous and seamless connectivity to the network. A wireless mesh network is not used for autonomous fleet management, but it can sometimes be used in an underground mining environment in areas which lack any sort of network connectivity.
• Sensing and imaging technology: The main sensors found on autonomous vehicles include LiDar systems, radio detection and ranging (radar) systems and visual cameras. Each sensor provides different types of information. LiDAR systems are the most prominently featured sensors on autonomous vehicles and measure distance by emitting laser lights toward a point and analysing the reflected light. When combined with rapidly rotating mirrors, they can create 3D models of their environment.
• System process: The system process is the brain of the truck and relays information from the vehicle, servers and command centre. The powerful CPU computing power installed on each equipment helps in making decisions in real-time.
• Navigation technology: GPS tracks the location of a vehicle by receiving signals from orbiting satellites. GPS can enable an autonomous vehicle to choose the shortest route from one location to another. However, there are limitations to GPS as the accuracy in determining a vehicle’s position can vary by metres even under ideal conditions. Inertial navigation systems (INS) – which include on-board sensors – reduce the vehicle positioning error when the GPS signal is lost. The sensors, such as accelerometers and gyroscopes, continuously calculate and update the location of the vehicle without external information.

Figure 10 *

Image-based object detection by AHS trucks

Benefits of automation in mining

Mines worldwide are integrating automation into their operations to enhance safety, improve productivity, reduce cost and adopt sustainable practices. The degree of gains, however, vary according to the maturity level of the deployment and adoption, and across different countries and geographic regions. The advantages of automation for the mining sector are as follows:

Enhanced on-site safety

Improved productivity, reduced costs, meeting expectations on sustainability.

Deploying autonomous equipment in mining operations reduces the need for human presence on the ground, thus protecting workers from potentially hazardous situations. Meanwhile, in its technology roadmap for the coal sector, the Ministry of Coal has also noted that technology in mining operations can lead to safer working conditions via improved underground communication, more sophisticated mineral and metal transportation, and emergency response measures. 10   While autonomous equipment offers increased safety, there are some challenges which need to be addressed. For instance, machine-to-machine collisions can occur, which have significant cost implications in terms of equipment damage recovery. This has prompted OEMs and technology providers to focus on developing robust solutions with more accuracy and reliability.

Autonomous technology has become a viable solution in situations where human efficiency is compromised due to harsh operating conditions and fatigue. Automation has made it possible to use machines more efficiently by improving how they are handled and ensuring that they operate at a uniform speed. This has a direct impact on production as there’s higher productivity, increased tire tonne-kilometre per hour (TKPH), higher equipment availability and reduced unplanned maintenance. Embracing automation can lead to

• an increase of 15% to 20% in output
• a decrease of 10% to 15% in fuel consumption
• decrease in tire wear by 5% to 15%
• an increase in truck up-time by 10% to 20%
• decrease in maintenance by 8%. 11

Use of autonomous equipment can directly impact operating and maintenance costs through reduced fuel consumption, increased tire life and productivity, and reduced unplanned maintenance. For example, a global mining corporation using autonomous haul trucks reported 13% reduction in fuel use. 12  While reduction in operator cost adds a significant percentage to the cost savings of a company in a developed country, the same is not true for developing nations where wages are generally low. Moreover, the CapEx cost for the equipment can be prohibitive. Innovative new retrofitting technologies compatible with different classes of equipment are playing a key role in making the technology accessible in developing countries. Automation can reduce:

• maintenance cost by 17%
• operating cost by 30%. 13

Through most of human history, mining technology has been centred on maximising yields while minimising associated costs. However, striking a balance between economic growth and environmental sustainability has remained a challenge. In order to mitigate the adverse ecological impact while continuing to foster growth, it is important to adopt responsible and innovative approaches. Reduced fuel consumption by autonomous equipment directly reduces carbon emissions and makes it a sustainable option. However, with the introduction of alternate fuel options such as hydrogen fuel cell and liquified natural gas (LNG), carbon emissions can be further reduced, strengthening the sector’s environment, social and governance (ESG) compliances.

The imperative of autonomous mining in India

OEMs can play a key role in encouraging automation by providing technology that is aligned with the operating models in Indian mining. While much of the technology already exists, its adoption is limited in India owing to the lack of infrastructure, shortage of skilled workforce and cost economics. Another major hurdle is that the technology is sometimes unfit for use in the equipment class deployed in operations. These barriers can be overcome with a deeper and collective understanding of the needs of the Indian mining sector, which also highlights the need for technology customisation requirements. Mining companies have started taking conscious steps in terms of factoring in customisation requirements by making pilot deployments or shifting to specific equipment based on their requirements. Some of the major developments in this space are:

• Development of a technology roadmap for the coal sector: The Ministry of Coal, in consultation with various stakeholders, has drafted a roadmap for technology deployment and possible new technological interventions in future. The roadmap outlines proposed autonomous trucks and drills deployment as a futuristic initiative in a phased manner. 14
• Introduction of tele-remote mining equipment in underground operations:  To make its operations safe and efficient, an Indian integrated mining and resources producer and pioneer in adopting advanced technologies has tied up with a technology partner to deploy autonomous solutions in two underground loaders in one of its mines. The machines will be controlled by tele-remote operations from underground automation centres. 15
• Roll out of tele-remote surface drilling:  Indian mines have started adopting automated surface drill rigs that provide high-quality drilling. In such a setup, the operator operates the equipment in line-of-sight mode from the remote operator station. This keeps the operator away from potentially hazardous situations.

Key drivers for autonomous mining operations in India

The successful implementation and deployment of autonomous operations in the Indian mining sector demands a comprehensive approach. Some of the key drivers that can collectively pave the way for more proactive autonomous mining practices in India include:

• amendments in the regulatory landscape
• collaboration among OEMs
• adherence to safe and sustainable mining practices
• economies of scale
• change in work culture.
• Amendments in the regulatory landscape
• Collaboration among OEMs
• Adherence to safe and sustainable mining practices
• Economies of scale
• Change in work culture

Regulations will need to be amended to encourage the use of technology which can boost efficiency while reducing the environmental impact. Mining and its ancillary activities such as mineral beneficiation and its storage and transportation are highly regulated and impacted by commodity prices, market forces and technological advancements. Regulations, therefore, play a key role in ensuring safe and sustainable mining practices. When it comes to integration of autonomous technology, regulatory frameworks can be pivotal in shaping the sectoral landscape as well. For instance, opening up the sector to new entrants can foster healthy competition, resulting in more innovation and collaboration.

It can be challenging for mining operators to use automated equipment from multiple OEMs. Therefore, OEMs need to encourage interoperability among autonomous systems so that they can be seamlessly integrated across equipment. Retrofitting of mining equipment from multiple suppliers requires a functional safety framework system and advanced practices. Therefore, technology providers, OEMs and mine owners should collaborate and redefine the mining industry by adopting new technologies and developing an advanced and robust ecosystem. Moreover, academia-industry partnerships should be encouraged for R&D to further expedite the introduction of an autonomous mining fleet in the Indian mining landscape.

Safety and sustainability are among the most touted benefits of autonomous mining operations. Workers are often exposed to harsh conditions and significant risk in both open-pit and underground operations. Companies that opt for autonomous equipment can reduce the risk exposure of their workforce. Moreover, shifting towards automation aligns with the sustainability efforts of mining companies that are increasingly trying to decarbonise mining operations by reducing emissions.

Companies can leverage autonomous systems for continuous and efficient mining processes to gain a competitive advantage over their counterparts. Autonomous equipment can operate round the clock, resulting in increased productivity and more efficient mineral extraction. This can lead to higher yields and reduced operating costs per tonne of material extracted. While automation may add to substantial CapEx costs, mining operations can cover these with improved yields.

Implementation of new technology is often met with resistance from the workforce, mainly due to the fear of job loss. Upskilling the workforce to perform more value-added services can overcome this challenge. Moreover, it is important to bring about a shift in employee mindset. Organisations can drive this transformation through effective change management.

Apart from the sectoral drivers, there are some technical factors that can promote the adoption of autonomous technology. These are as follows:

• Network infrastructure: Automation in mines requires a robust IT infrastructure for high-speed, low-latency continuous network connectivity. Existing terrestrial network mechanisms such as 4G, VoLTE, Wi-Fi have low reliability. Maturity and adoption of 5G technology can help overcome this challenge.
• The Internet of things (IoT) device availability: IoT systems can enable more efficient day-to-day operations through real time monitoring or by enabling early detection of possible dangers. India relies heavily on the import of IoT devices, such as sensors, which can pose challenges to the continuous uptime of the equipment in case of sensor and device unavailability. Therefore, a thrust on indigenous development can help OEMs and technology providers to find the right platform to manufacture such devices, which will also boost the economic growth of the mining sector.
• Mine planning:  Mine planning – which involves the development of a detailed plan for extraction activities – will need a more structured approach to ensure that the predefined path for trucks is well-planned. Implementing digital solutions in planning activities can enhance efficiency and sustainability. For instance, developing 3D models of mines can facilitate the simulation of contingency scenarios.

Looking ahead

Increased focus on decarbonisation and digitalisation of the mining sector will bring sustainable mining practices to the forefront. This will encourage mining companies to reduce their ecological footprint for long-term economic viability. Although embracing automation will propel sustainability efforts, widespread technology adoption would require a rejig of the regulatory landscape, restructuring of the operating business model, financial support, technological investments and overcoming workforce shortage.

In India, the prevalent mining business model involves the deployment of HEMM, machinery and other equipment at the mine site for waste, overburden and mineral removal. With autonomous fleet deployment, this business model would need to be amended. Simultaneously, statutory authorities across mining and technology will need to extend adequate support to ease the adoption of the advanced mining technology. Identifying alternative ways of workforce engagement and establishing upskilling programmes would also be required to support the deployment of autonomous technology.

How PwC can help

PwC’s dedicated Mining and Metals practice has worked with over 50 global mining companies. The team has developed a comprehensive roadmap for technological adoption that can assist mining companies that are embarking on their automation journey. The areas in which PwC can empower mining companies to undergo a digital transformation are highlighted below.

• Assessing readiness for autonomous mining operations
• Developing a roadmap
• Rendering implementation support
• Assistance in developing institutional framework and capability development
• Assessment of readiness of the existing mining operation for deployment of autonomous equipment
• Assessment of infrastructure requirements for deployment of autonomous mining activities
• Risk assessments and risk mitigation plans for transitioning to autonomous operations
• Benchmarking with global best practices and mapping the identified gaps
• Designing a strategic roadmap for transitioning to autonomous mining operations
• Bringing in the right technology solution provider
• Designing a comprehensive total cost of ownership (TCO) model and evaluating the tangible benefits
• Designing a suitable business model for deployment of autonomous mining operations
• Designing appropriate operating and service models
• Selection of OEM vendors through competitive bidding and assistance in contract management
• Assistance in programme management, monitoring and governance during the implementation
• Preparation of training modules, working guidelines of relevant stakeholders
• Preparation of standard operating procedures (SOPs) for modified and revamped business processes
• Skill-gap mapping and designing a skill upgradation programme
• Supporting the organisation’s change management initiatives
• Setting up an autonomous mining operations centre of excellence
• Supporting the creation of code of practice

Also contributing to this article were Pallab Saha, Kousik Maiti, Abhinav Sengupta and Prateek Sharma .

• India to become $5 trillion economy early in Amrit Kaal: FinMin
• PwC analysis
• Voronov, Yuri & Voronov, Artyom & Makhambayev, Daulet. (2020). Current State and Development Prospects of Autonomous Haulage at Surface Mines. E3S Web of Conferences. 174. 01028. 10.1051/e3sconf/202017401028
• PwC analysis based on secondary sources.
• PwC analysis based on secondary research.
• Technology roadmap for coal sector
• Australasian Mine Safety Journal, Autonomous mining trucks: Are there any limitations?
• Gölbaşı, Onur & Dagdelen, Kadri. (2017). Equipment Replacement Analysis of Manual Trucks with Autonomous Truck Technology in Open Pit Mines
• Autonomous solutions in India
• * Autonomous and remote operation technologies in Australian mining , Cluster research report No. 2.5
• * Autonomous and remote operation technologies in Australian mining, Cluster research report No. 2.5

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India's Mining Sector: Towards a Sustainable and Equitable Future

Mining is an important activity for India. With 3527 mining leases for 40 major minerals, extending a total lease area of roughly 315,986 hectares, India is a major producer of crucial minerals. The mineral resource sector has the potential to impact environmental sustainability, social inclusion, and economic development.

The Mineral resource sector has played a vital role in the world economy and human development from time immemorial. The achievement of the United Nations' Sustainable Development Goals (SDGs) and the execution of the Paris Agreement is dependent on the sector. While the sector is diverse, it has the opportunity and potential for positive contribution to all 17 SDGs and the execution of the Paris Agreement. The sector's contribution to SDGs encompasses both, its role in advancing several SDGs as well as hindering the achievement of the SDGs and related targets. The world's population estimated to rise from over 7.8 billion to 9.6 billion by 2050 presents additional challenges on the sector in meeting the demands of the rising population and growing per capita consumption. While the introduction of global, national regulations and legislation in the last two decades has been remarkable, the implementation of the same varies greatly between regions, particularly in developing countries such as India.

Mining is an important activity for India. With 3527 mining leases for 40 major minerals, extending a total lease area of roughly 315,986 hectares, India is a major producer of crucial minerals such as chromite, iron ore, coal, and bauxite, among others. Mining contributes to 2.5 per cent of the Gross Domestic Product (GDP). The total mineral production is valued at 1,299,500 million, and 18,963,480 million of mineral exports in 2020. The mining sector plays a vital role in the national economy, employs more than half a million persons, and contributes to the country's revenue through exports, royalty (tax paid in return to the right to use), dead rent, cess, sales tax, and duties. Yet, the environmental (land degradation, land conversion, mine wastes, air pollution, groundwater depreciation, and pollution of water bodies) and social externalities associated with mining are of severe concern. 1 Land-use-related impacts, population displacement and resettlement, health-related impacts, social and cultural disruption, inequality, and conflicts appear to be the most concerning social impacts of mining in India. 2

The fact that much of the country's natural resources are located in forest-covered areas raises further environmental and socio-economic concerns. As one of the fastest-growing economies of the world, there is increased pressure for metals/minerals to meet the demands of an estimated 6 per cent growth in GDP, in the following decade. India's commitment to the Paris Agreement entails the requirement of crucial minerals for the transition to a lower-carbon economy. The 'Make in India' initiative for expansion of the industrial sector would further increase the mineral resources demand. Depletion of mineral reserves is an issue of concern already. Reports indicate a 15 per cent drop in iron ore production in 2018, with reserves in Goa expected to exhaust within a decade and an anticipated reduction in production from Odisha. 3 All these, demand the incorporation of sustainability and equity in the sector.

Mineral Resources and Sustainable Development

The mineral resource sector has the potential to contribute significantly to the achievement of the SDGs through socio-economic benefits, foreign exchange earnings, employment and livelihood, development of infrastructure, communication, provision of vital services, and supply of raw materials for green technologies. As mentioned earlier, the mineral resource sector has the potential to impact environmental sustainability, social inclusion, and economic development. The impacts on water, land, climate and humans as well as on flora, fauna that are reliant on these resources impacts environmental sustainability. The SDG6 (Clean Water and Sanitation), SDG15 (Life on Land), SDG7 (Energy Access and Sustainability), and SDG13 (Climate Action) are affected by this sector.

The mineral sector can pose challenges in terms of impact on livelihoods and human rights, provide economic opportunities to communities near the mines and beyond. An inclusive and equitable approach will help the sector towards achieving SDG1 (End Poverty), SDG5 (Gender Equality), SDG10 (Reduced Inequalities), and SDG16 (Peace, Justice and Strong Institutions). Generation of economic opportunities is also the key towards achieving SDG8 (Decent Work and Economic Growth). There are several direct and indirect economic benefits that can be accrued through this sector. The sector can drive innovation and result in the development of infrastructure for transportation, communication and help to develop energy and water infrastructure contribution to the SDG9 (Infrastructure, Innovation and Industrialization) targets. As the sector provides raw materials critical for development there is an opportunity for collaboration (SDG17: Partnership for the Goals) within and beyond the sector to minimize waste and act as a driver for reuse and recycle (SDG16: Responsible Consumption and Production) through a circular economy approach.

The main challenge in the integration of sustainable development in mineral resource extraction and production is on account of the non-renewable and finite nature of mineral resources further exacerbated by the dependence on other resources such as water, energy, land, etc., for extraction/processing. Global primary materials consumption is expected to increase two-fold by 2060, from 89 gigatonnes (Gt) in 2017. 4 Much of the mineral resource extraction is in developing countries and regions with poor human development indicators. Reinvestment of the revenue earned from mining for equity, sustainable development, maintaining the value of natural resources extracted and ensuring inter-generational equity is essential. Several studies reinforce non-renewable exhaustible mineral resources as finite shared inheritance and framing and accounting the proceeds from mineral exploitation can result in major improvements in natural resource management. 5 The three principles of physical sustainability, generational equity, and global equity for achieving sustainable development are thus imperative.

Environmental Legislations and Regulations Supporting Sustainable Development in the Indian Mining Sector

The Indian mining sector is mainly governed by the Mines Act, 1952 and the Mines and Minerals Development and Regulation Act, 1957, ('MMDR'). While the amendment of the MMDR, 1957 has been a watershed moment in the country in line with the Sustainable Development Framework, several environmental regulations existed since the 1970s. Some of the early enactments towards environmental protection have been the first steps in paving the path for sustainable development in the mining sector. The government policy in India in the initial years after independence considered minerals as a 'basic' and 'strategic' importance for the country. Hence, the sector was led in the absence of many environmental and social regulations. The environmental and social considerations gained impetus in the country with the participation of India in the UN conference on Human Environment, Stockholm, 1972. Several environmental enactments were a response to the implementation of the recommendations at the Stockholm Convention.

The Coal Mines (Conservation & Safety) Act, 1974, aimed at improving efficiency of coal, promoting technology for reducing damage to environment, conservation of coal resources and others. Some Acts (along with their associated rules) for management of the environment, applicable to the mines include—i) The Water (Prevention and Control of Pollution) Act, 1974; ii) The Water (Prevention and Control of Pollution) Cess Act, 1977; and iii) The Air (Prevention and Control of Pollution) Act, 1981. The introduction of the Environment Protection Act (EPA), 1986 (amended in 2006) and the Forest (Conservation) Act, 1980 aimed at monitoring mining activities for the protection of the environment during all the phases of a mineral resource extraction cycle including planning, production process, and closure. These paved the first step for acknowledging natural resources and society, incorporating two of the pillars of sustainable development. The National Environmental Policy, 2006, aimed at conserving environmental resources by increasing resource efficiency, promoting intergenerational equity, safeguarding the principles of good environmental governance, and promoting environmental protection.

Globalization, other developments internationally, and the country's commitment to Agenda 21, initiated the discourse on sustainable development in various sectors of the economy. Since 1994, Environmental Impact Assessments (EIA) and Clearances were made statutory for 29 activities including mining. The Forest (Conservation) Act, 1980; the Forest Right Act, 2006; and the Land Acquisition Act, 2013 are also important regulations. The Noise Pollution Rules, 2000; Ozone Depleting Substances Rules, 2000; Hazardous and Other Wastes Rules, 2016; Solid Waste Management Rules, 2016 are applicable for environmental management of the sector.

The Sustainable Sand Mining Guidelines (2020) aim to maintain and restore the ecology of the river and other sand sources through sustainable and environment-friendly management practices. The need of circular economy for the achievement of sustainable development, gained recognition. To expedite the transition from a linear to a circular economy, 11 committees led by the respective ministries (for addressing 11 focus sectors, one of them being scrap metals) have been formed.

Benefit Sharing for Sustainable Development and Equitable Future

Benefit sharing addresses the mismanagement of resource wealth in the mineral resource-rich districts of India that continue to rank low in human development indicators, widening adverse socio-economic externalities, 6 lacking alternate opportunities for economic development. Effective implementation of benefit-sharing strengthens the case for inclusive mineral development, retaining significant economic benefits in the region of mineral extraction and investing for the future. 7

From the mining companies' perspective, the Company's Act, 2013 mandated companies to share profit through Corporate Social Responsibility on developmental challenges and thus contribute towards development activities for building the social capital of the region.

The Mineral Foundation of Goa (MFG), a non-profit organization founded by nine Goan mining corporations to address social and environmental externalities in the State's mining belt, has completed several development projects and worked with the State for the benefit of the mining communities in Goa.

Sustainable development in the mining sector in India was first formally mandated with the MMDR amendment in 2015, following the recommendations of the Committee led by Anwarul Hoda in 2005. This led to the development of the District Mineral Foundations (DMFs) for driving sustainable development of the region and the people affected by mining. The creation of the DMF has been one of the most important steps towards institutionalizing benefit sharing in the Indian mining sector. The Act was further amended in 2020 to sustain mineral production and in 2021 to further boost mineral extraction.

The National Mineral Policy, 1993, an important legal framework for the mines and mineral sector stipulates provisions for regulation of minerals, reviewed as the National Mineral Policy, 2008 for the first time incorporated the need for sustainable mining to preserve and augment the exhaustible mineral reserves and optimal utilization of natural resources. It established all mining to be undertaken within the comprehensive Sustainable Development Framework, which includes guiding principles for effective closure of mines, with appropriate reclamation/rehabilitation for maintaining the ecological condition. The National Mineral Policy approved in February 2019 incorporates the public trust doctrine, intergenerational equity principle, and ownership of natural resources as commons. It holds the State as the trustee on behalf of the people to ensure future generations receive the benefit of inheritance calling for stringent regulations to ensure environmentally sustainable mining practices incorporating social and economic considerations.

Several jurisdictional deliberations have also led to the suspension of mining leases, compensation, and reassessment of environmental and social considerations often promoting sustainable development. These include the amendment of the MMDR, 1957; formulation of the National Mineral Policy (2019); incorporation of sustainable development activities in mining regions through the Maharashtra Mineral Development Fund (MDF), 1999; Odisha Mineral Bearing Areas Development Corporation (OMBADC), 2014; the Comprehensive Environmental Plan for Mining Impact Zone (CEPMIZ), 2014; the Goa Mineral Ore Permanent Fund Trust Scheme (2014) among several others. To ensure Intergenerational Equity (IE) and Sustainable Development, Goa's Permanent Fund—the first-of-its-kind in India, obligating the State and the Legislature on behalf of present-day and future generations to protect current resource wealth and ensure biological survival.

The Supreme Court judgment (1997), of 'Samata vs. State of Andhra Pradesh,' for the first time mandated 20 per cent of profits from mining for the development of mining-affected regions.

The Way Forward

Despite India's longstanding institutions for environmental protection, regulatory violations, poor implementation of environment and community rights, over-extraction, and illegal mining continue to anguish the sector. 8 Modest experience with benefit-sharing highlights inefficient management of funds, underutilization, inadequate participation of mining communities, lack of transparency, and need for enhancing governance. 9

The central role of political and administrative bodies has led to DMF funds to be considered as Government funds leading to poor utilization for the benefit of the mining regions. Several funds including the DMF, CEPMIZ, OBMADC, etc., suffer from the above. Transfer of DMF funds for other activities has led to the Government order (2021) reiterating the allocation of DMF funds for mine-affected regions and people. These demand adequate participation of the community affected by mining especially in decision making, transparency in the use of funds, enhanced capacities of local institutions, and good governance. Local institutions are inadequately represented or lack the capacities in decision making, planning, implementation, and monitoring. The Ministry of Mines in January 2019 recommends the engagement of Gram Sabhas in the planning activities of the DMF and several state DMF laws necessitate the same. Mining-affected people in most remote areas of India often lack access to technology, adequate information of these funds/initiatives, 10 and are unaware of their rights. Local institutions have low awareness, and lack the capacities to engage. While the legal institutions are in place enhancing the capacities of local institutions, and human capability is crucial and needs to be mandated within the sustainable development initiatives.

Transparency in the use of the funds for sustainable development is also questionable with very less information on the public domain regarding funds such as the Goa Mineral Ore Permanent Fund Trust, the CEPMIZ and even the DMF in many states. India is yet to adopt the Extractive Industries Transparency Initiative (EITI), the global standards of good governance ensuring transparency and accountability of the sector.

Regulations mandate socio-economic rehabilitation and environmental restoration of mined-out areas, especially post-closure of mines. Yet, there is a lack of evidence on the implementation of the same. Adequate funding provisions for post-mining rehabilitation and strict regulation of the same should be ensured. Appropriate monitoring mechanisms with community-based monitoring at the regional level are recommended in the mineral production, environmental and social regulation and sustainable development initiatives.

Stringent regulatory mechanisms are required in the sector. Illegal mining is a violation of Section 21 of the MMDR Act. Reports estimate the existence of almost 115,000 illegal mines. Poor implementation of environmental regulations in the legal mines continues.

Resource efficiency and circular economy can reduce the pressure on mineral resources through structural changes and technology while maintaining the growth potential. Life cycle management addresses the renewability of minerals and associated environmental issues during extraction, production, use, and waste management. Closing the resource loop through recycling, remanufacturing, slowing the resource loop through reuse, narrowing the resource flow through increased material productivity, improving assets, and changing the individual behaviour is necessary for the protection of virgin resources and efficient management of supporting resources.

To conclude, a holistic approach harmonizing all the facets of sustainable development in the mining sector must be aligned by the Government and the Industry.

[1] Ghosh, 1989; Bina Agarwal, 1992; Tiwari & Dhar 1994; Dhar, 2000; Ghose, 2000 [2] Saha et al., 2011; Singh & Singh, 2016; Bisht & Gerber, 2017 [3] FICCI, 2018 [4] OECD, 2021 [5] Basu & Pegg, 2020 [6] Basu and Pegg, 2020; CSE, 2011 [7] Söderholm & Svahn, 2015 [8] Shreshta Banerjee, 2020 [9] CSE, 2018; OXFAM, 2018; Joyita Ghose, 2018 [10] CSE, 2018

Article contributed by Ms Mary Abraham, Mu Gamma Consultants Pvt Ltd.

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India Organic Biofach 2022

Gulfood dubai 2023, metals and mining, metals & mining industry in india, india is the second-largest producer of coal and crude steel in the world and also the fourth-largest iron ore producer in the world., advantage india, demand growth.

* Being the third largest energy consuming country in the world, there is always increased demand for power and electricity in the country, and hence the surge in demand for coal.

* Demand for steel is likely to grow by ~10% as the government’s augmented focus on infrastructural development continues with increased construction of roads, railways, airports, etc.

* India has set the targets of achieving a total crude steel capacity of 300 million tonnes per annum (MTPA) and total crude steel demand/production of 255 MTPA by 2030-31.

Attractive Opportunities

* By becoming Aatmanirbhar in producing specialty steel, India will move up the steel value chain and come at par with advanced steel making countries like Korea and Japan.

* Under the PLI Scheme for Specialty Steel, 57 MoUs have been signed, attracting investments of Rs. 29,500 crore (US$ 3.55 billion), creating an additional capacity of 25 MT and generating employment for 17,000 people by FY 2027-28. As of December 2023, companies have invested Rs.12,900 crore (US$ 1.55 billion), with a further expected investment of Rs. 3,000 crore (US$ 360 million) in FY24. Five units have already commenced production, and nine more are set to begin operations in the last quarter of FY24.

Policy Support

* Enactment of Mines and Minerals (Development and Regulation) Amendment Act, 2021 enabled captive mines owners (other than atomic minerals) to sell up to 50% of their annual mineral (including coal) production in the open market.

* In December 2023, the Ministry of Mines proposed capping performance security and upfront amounts for mining critical minerals to attract more bidders, reduce barriers to participation in auctions and expedite the process for mining leases.

Competitive Advantage

* India holds a fair advantage in cost of production and conversion costs in steel and alumina.

* As of FY22, the number of reporting mines in India were estimated at 1,319, of which reporting mines for metallic minerals were estimated at 545 and non-metallic minerals at 775.

* India is the second-largest crude steel producer in the world.

Metals and Mining Industry Report

Introduction.

India holds a fair advantage in production and conversion costs in steel and alumina. Its strategic location enables export opportunities to develop as well as fast-developing Asian markets. As of FY22, the number of reporting mines in India were estimated at 1,319, of which reporting mines for metallic minerals were estimated at 545 and non-metallic minerals at 774.

Minerals are precious natural resources that serve as essential raw materials for fundamental industries, so the growth of the mining industry is essential for the overall industrial development of a nation. The vast resources of numerous metallic and non-metallic minerals that India is endowed with serve as a foundation for the expansion and advancement of the nation's mining industry. India is largely self-sufficient in metallic minerals including bauxite, chromite, iron ore, and lignite as well as mineral fuels like coal and lignite. The industry has the potential to significantly impact GDP growth, foreign exchange earnings, and give end-use industries like building, infrastructure, automotive, and electricity, among others, a competitive edge by obtaining essential raw materials at reasonable rates.

Rise in infrastructure development and automotive production are driving growth. Power and cement industries are also aiding growth for the sector. Demand for iron and steel is set to continue given the strong growth expectations for the residential and commercial building industry.

Market Size

Production level of important minerals in December 2023 were: Coal 929 lakh tonnes, Lignite 40 lakh tonnes, Petroleum (crude) 25 lakh tonnes, Iron ore 255 lakh tonnes, Limestone 372 lakh tonnes, Natural gas (utilized) 3078 million cu. m., Bauxite 2,429 thousand tonnes, Chromite 235 thousand tonnes, Copper conc. 11 thousand tonnes, Lead conc. 35 thousand tonnes, Manganese ore 319 thousand tonnes, Zinc conc. 148 thousand tonnes, Phosphorite 117 thousand tonnes, Magnesite 16 thousand tonnes and Gold 122 kg.

Important minerals showing positive growth during December 2023 over December 2022 include Magnesite (83.7%), Lead Conc. (16.5%), Lignite (14.6%), Copper Conc. (13.7%), Limestone (12.5%), Coal (10.8%), Zinc Conc. (7.8%), Bauxite (6.6%), Natural gas (U) (6.6%), Manganese Ore (4.0%) and Iron Ore (1.3%).

The index of mineral production of the mining and quarrying sector for the month of December 2023 at 139.4, was 5.1% higher compared to the level in the month of December 2022.

India's overall coal production has seen a quantum jump to 893.08 MT in FY23 as compared to 728.72 MT in FY19 with a growth of about 22.6%.

In April-January FY24, coal production stood at 784.11 MT, registering a growth of 12.18% from the same period last year. India is the world's second-largest coal producer as of 2023.

In April-January FY24, the production of crude steel stood at 118.37 MT and that of finished steel was 113.85 MT.

In FY23, production of crude steel stood at 125.32 million tonnes (MT), finished steel at 121.29 MT and consumption of finished steel at 119.17 MT has exceeded their respective levels achieved over the corresponding period of not only COVID affected last two years but also pre COVID years as well. India's iron ore production is estimated to stand at 257.85 MT in FY23, while it stood at 253.97 MT in FY22 - a sharp increase of 23% compared with 205.04 MT in FY21. India's iron ore production stood at 202.64 MT during April-December 2023.

In 2022-23, exports of iron ore stood at US$ 1.75 billion as compared to US$ 3.18 billion in 2021-22.

The production of aluminium was 4.07 MT in FY23.

The index of mineral production of mining and quarrying sector for the month of December 2023 (Base: 2011-12=100) stood at 139.4, 5.1 % higher compared to the level in the month of December 2022. According to provisional data from the Indian Bureau of Mines (IBM), the cumulative growth for the period April- December, 2023-24 over the corresponding period of previous year is 8.5 % percent.

In FY23, mineral production is estimated at Rs. 1,18,246 crore (US$ 14.37 billion). In FY22, mineral production was estimated at Rs. 1,32,747 crore (US$ 16.04 billion). India ranks fourth globally in terms of iron ore production. India's iron ore production is estimated to stand at 257.85 MT in FY23, while it stood at 253.97 MT in FY22, up 23% from FY21. In FY22, India had a total number of 901 steel plants producing crude steel. In April-January FY24, the production of crude steel stood at 118.372 MT and that of finished steel was 113.848 MT. India’s steel production is estimated to grow 4-7% to 123-127 MT in FY24. In April-January FY24, production of hot metal, crude steel and saleable steel by SAIL stood at 16.97 MT, 15.94 MT and 15.30 MT, respectively. Aluminium production in India stood at 3.47 MT between April-January FY24. The world production of primary Aluminium during the same period was about 59.562 MT. The share of India in the world primary Aluminium production was around 5.8% during this period.

Investments/ Developments

Some of the investments/ developments in the Metals & Mining sector in the recent past are as follows:

• As per data from the Ministry of Statistics and Programme Implementation (MOSPI), India's mining GDP increased from Rs. 76,877 crore (US$ 9.25 billion) in the third quarter of FY23 to Rs. 82,680 crore (US$ 9.95 billion) in the third quarter of FY24.
• The index of mineral production of mining and quarrying sector for the month of December 2023 stood at 139.4, 5.1% higher as compared to the level in the month of December 2022.
• In FY24 (until January 2024), the combined index of eight core industries stood at 156.0 driven by the production of coal, refinery products, fertilizers, steel, electricity, and cement industries.
• Between April 2000-December 2023, FDI inflows in the metallurgical industry stood at US$ 17.46 billion, followed by the mining (US$ 3.50 billion), diamond & gold ornaments (US$ 1.27 billion), and coal production (US$ 27.73 million) industries.

In March 2024, Karnataka and Rajasthan initiated the auction of Exploration Licences (EL) for critical and deep-seated minerals, marking the first such auction in India. Under the amended Mines and Minerals (Development and Regulation) Act, 1957, introduced by the MMDR Amendment Act, 2023, 29 critical minerals are eligible for exploration and mining concessions.

In January 2024, India and Argentina signed an agreement to undertake the exploration and development of five lithium blocks, enhancing India's efforts in sourcing lithium. Khanij Bidesh India Limited (KABIL) has obtained exploration and exclusivity right for these five blocks.

On August 3, 2023, the Rajya Sabha passed the Offshore Areas Mineral (Development and Regulation) Amendment Bill, 2023 which seeks to make amendments to the Offshore Areas Mineral (Development and Regulation) Act, 2002 (‘OAMDR Act’). The Bill was passed by Lok Sabha on August 1, 2023.

In July 2023, the Union Cabinet approved amendments to the Mines and Minerals (Development and Regulation) Act-1957 to allow the mining of lithium and other minerals.

Coal production from captive mines increased by 18.67% y-o-y in FY24 (April- September 2023) and contributed 14.96% to the total coal production.

In February 2023, Tata Steel and Central Building Research Institute (CBRI), a constituent of the Council of Scientific and Industrial Research (CSIR), signed an MoU to collaborate on research, academic growth, and sustainable solutions in mining.

In February 2023, ArcelorMittal - Nippon Steel is investing Rs. 60,000 crore (US$ 7.3 billion) to expand its steelmaking capacity in Hazira to 15MT a year from 9MT.

In February 2023, NMDC signed an agreement for collaborative research with CSIR-IMMT, Bhubaneswar on “Feasibility Studies for Preparation of Fused Magnesia from Kimberlite Tailings” at its Head Office in Hyderabad.

In November 2022, IIT Bombay and JSW Group entered into an exclusive strategic agreement to establish first-of-its-kind, state-of-the-art JSW Technology Hub in India for steel manufacturing in India.

In August 2022, Tata Steel signed a MoU with the Government of Punjab for setting up a 0.75 MnTPA long products steel plant with a scrap-based electric arc furnace.

In July 2022, Hindalco Industries Limited has signed an MoU with Phinergy and IOC Phinergy Private Limited (IOP) on R&D and pilot production of aluminium plates for Aluminium-Air batteries, and recycling of aluminium, after usage in these batteries.

In October 2022, Coal India Limited (CIL) signed a MoU with Rajasthan Rajya Vidyut Utpadan Nigam Limited (RVUNL), for setting up 1,190 MW solar power project.

In January 2023, Vedanta announced that its board had approved the sale of its international zinc assets in South Africa and Namibia to subsidiary Hindustan Zinc (HZL) for US$ 2.98 billion.

In March 2022, MOU with detailed collaborative framework was between KABIL, India, and Critical Mineral Office (CMO), Department of Industry, Science and Resources (DISER), Govt. of Australia for carrying out joint due diligence and further joint investment in Li & Co mineral assets of Australia.

In February 2023, JSW Group announced to build a steel plant in Andhra Pradesh's YSR Kadapa district with an investment of Rs. 8,800 crore (US$ 1 billion).

In 2021, an Indian state committee recommended the expansion of Vedanta Ltd.’s Lanjigarh Alumina refinery from 1 million tonnes to 6 million tonnes, an investment that would cost the company Rs. 6,483 crore (US$ 993 million).

In February 2023, Essar Capital Limited, investment manager of Essar Global Fund Limited, announced to set up steel plants in Odisha and a facility to import liquefied natural gas (LNG) at Hazira in Gujarat.

On 2nd September 2022, Steel Authority of India Ltd. (SAIL) has supplied about 30000 tonnes of the specialty steel for nation’s first indigenously built Aircraft Carrier INS Vikrant for Indian Navy which commissioned at Cochin Shipyard Ltd.

Innovative mineral exploration activities using state-of-the-art technology by Geological Survey of India (GSI), stepped up efforts by Khanij Bidesh India Limited (KABIL) to source strategic minerals from countries like Australia, Argentina, and Chile.

Three Indian state-run companies, National Aluminium Co Ltd, Hindustan Copper Ltd and Mineral Exploration Corp formed a joint venture to buy mining assets overseas that have minerals such as lithium and cobalt, which are used in the manufacture of batteries for electric vehicles.

• Production of metallic minerals in the country increased from US$ 6.96 billion in FY18 to US$ 12.88 billion in FY23P. In the same period, production of non-metallic minerals increased from US$ 1.16 billion in FY18 to US$ 1.48 billion in FY23P.
• India's iron ore production stood at 257.85 MT in FY23, an increase of 1.52% compared with 253.97 MT in FY22.
• ICRA has estimated the domestic aluminium demand growth to remain healthy at around 9% in the next two fiscal years, given the Government’s thrust on infrastructure development.
• In FY23, Vedanta's aluminium division will focus on backward integration and will put two of its mines in Odisha into production.
• Iron and steel imports stood at US$ 14.17 billion during April-December 2023.
• NMDC’s cumulative iron ore production (April-January FY24) stood at 36.32 MT as compared to 31.14 MT (April-January FY23).
• As of January 2024, India’s total installed electricity generation capacity stood at 429.96 GW.
• In 2021-22, India’s iron and steel export was valued at US$ 17.62 billion. During FY16-22, India’s export of iron and steel grew at a CAGR of 17.15%.
• In November 2021, JSW Steel announced that the company registered a 6% YoY surge in crude steel production at 1.42 million tonnes in October 2021.
• In November 2021, AMNS India announced that it is planning to manufacture specialty steel under the production-linked incentive (PLI) scheme.
• Vedanta Limited is planning a US$ 20 billion investment across its operations, including increase silver production and steel capacity.
• In June 2021, Mr. T.V. Narendran, the CII President, and Managing Director of Tata Steel, stated that steel firms have firmed up plans to invest ~Rs. 60,000 crore (US$ 8 billion) over the next three years in this sector.
• In May 2021, Vedanta Ltd. announced its plan to invest Rs. 10,000 crore (US$ 1.34 billion) in setting up an aluminium park in Odisha to facilitate companies that use metal to set up their manufacturing units in the facility.
• In May 2021, ArcelorMittal Nippon Steel (AMNS) signed a contract with Total (a France-based energy company) for supply of up to 500,000 tons of liquefied natural gas (LNG) per year until 2026.
• In February 2021, ArcelorMittal-Nippon Steel India, in agreement with the Odisha government, has planned to set up an integrated steel plant (with 12 MT capacity) in the state’s Kendrapada district for Rs. 50,000 crore (US$ 6.89 billion)
• In February 2021, two new iron ore mines were inaugurated in Odisha, with a production capacity of 15 lakh tonnes per month and ~275 million tonnes of consolidated iron ore reserves. These mines will bring in ~Rs. 5,000 crore (US$ 679.28 million) in annual revenue for the state and employment opportunities for locals.

Government Initiatives

The Government of India has adopted few initiatives in the recent past, some of these are as follows:

• In February 2024, the Union Cabinet approved the amendment to the Mines and Minerals (Development and Regulation) Act,1957 specifying royalty rates for 12 critical minerals, thus completing the rationalization process for all 24 strategic minerals. This move aims to streamline the mining sector and auction processes, aligning with recent amendments to the MMDR Amendment Act, 2023.
• In December 2023, the Ministry of Mines proposed capping performance security and upfront amounts for mining critical minerals to attract more bidders. Currently based on a percentage of the Value of Estimated Resources (VER), the move aims to reduce barriers to participation in auctions and expedite the process for mining leases.
• In October 2023, the Union Cabinet approved the amendment of the Second Schedule of the Mines and Minerals (Development and Regulation) Act, 1957, specifying royalty rates for three critical minerals: Lithium, Niobium, and Rare Earth Elements (REEs) paving the way for the auctioning of blocks for these minerals, as outlined in the MMDR Amendment Act, 2023.
• The government plans to monetize assets worth Rs. 28,727 crore (US$ 3.68 billion) in the mining sector over 2022-25.
• In 2022, PLI Scheme for domestic production of specialty steel has been approved with an outlay of Rs. 6,322 crore (US$ 762.4 million) by the Cabinet.
• Mines and Minerals (Development and Regulation) Amendment Act, 2021, notified on 28.03.2021, for giving boost to mineral production, improving ease of doing business in the country and increasing contribution of mineral production to GDP.
• Enactment of Mines and Minerals (Development and Regulation) Amendment Act, 2021 enabled captive mines owners (other than atomic minerals) to sell up to 50% of their annual mineral (including coal) production in the open market.
• Import duty on Anthracite/Pulverized Coal Injection (PCI) coal, Coke, and Semi-coke and Ferro-Nickel were reduced to zero.
• Export duty on Iron ores/ concentrates and iron ore pellets was raised to 50% and 45%, respectively.
• In addition, 15% export duty was imposed on pig iron and several steel products.
• District Mineral Foundation (DMF) has been established in 622 districts of 23 States and a total of Rs. 71,128.71 crore (US$ 8.5 billion) has been collected till October 2022 under DMF.
• In November 2022, the government removed export duties on steel and stainless steel to strengthen the nation's steel sector and allow it to firmly establish its position in the global market.
• The government plans to monetise assets worth Rs. 28,727 crore (US$ 3.68 billion) in the mining sector over 2022-25.
• The Ministry of Mines of the Government of India has signed MoUs with different nations.
• The Ministry of Mines notified the Mineral Conservation and Development (Amendment) Rules in November 2021 to provide rules regarding conservation of minerals, systematic and scientific mining, and development of minerals in the country for environment protection.
• Steel Authority of India Ltd. (SAIL) and Central Public Sector Enterprises (CPSEs), under the Ministry of Steel, supplied 48,200 tonnes of steel for the Purvanchal Expressway, which was inaugurated by Prime Minister Narendra Modi on November 16, 2021.
• As part of unlocking India’s vast mineral potential by exploration this year, the Ministry of Mines has handed over 152 mineral block reports to different state governments until November 2021. Also, 52 potential G-4 mineral blocks approved by the Geological Survey of India (GSI) have been handed over to 15 state governments.
• In July 2021, the Odisha government approved five key industrial projects worth Rs. 1.46 lakh crore (US$ 19.60 billion) that are expected to boost capacity of steel production by 27.5 million tonnes.
• In June 2021, the Union Cabinet, chaired by the Prime Minister Mr. Narendra Modi approved the memorandum of understanding (MoU) to be signed between the Ministry of Mines and the Secretariat of Mining Policy of the Ministry of Productive Development of the Argentine Republic. The MoU will provide an institutional mechanism for cooperation in the field of mineral resources.
• In Union Budget 2021, the government reduced customs duty to 7.5% on semis, flat and long products of non-alloy, alloy, and stainless steels to provide relief to MSMEs.
• To boost recycling of copper in India, the government announced reduction of import duty on copper scrap from 5% to 2.5% in the Union Budget 2021.
• The National Steel Policy aims to boost per capita steel consumption to 160 kgs by 2030-31. The government has a fixed objective of increasing rural consumption of steel from the current 19.6 kgs per capita to 38 kgs per capita by 2030-31.

There is a significant scope for new mining capacities in iron ore, bauxite and coal and considerable opportunities for future discoveries of sub-surface deposits. Infrastructure projects continue to provide lucrative business opportunities for steel, zinc, and aluminium producers. Iron and steel make up a core component for the real estate sector. Demand for these metals is set to continue given strong growth expectations for the residential and commercial building industry.

The Government of India has also helped in the development of the metals and mining sector in India by launching key policy initiatives. The National Mineral Policy, which was approved by the government in February 2019, has ensured improved regulation and enforcement, more transparency, balanced social and economic growth, and sustainable mining techniques. The policy grants industry status to the mining activities and boost private sector funding.

Additionally, it aims to facilitate the merger and acquisition of mining companies, entice private sector involvement in exploration, and permit the transfer of mineral corridors created specifically for metals and mining leases. In the future, both increased domestic demand and exports are projected to play significant roles in driving the industry's expansion and its contribution to GDP growth in a post-covid environment.

References: Media Reports, Press Information Bureau (PIB), Union Budget 2020-21, Ministry of Mines, Ministry of Coal, Ministry of Steel, Central Electricity Authority, Ministry of New and Renewable Energy, DPIIT

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India’s new mining reforms explained

India’s mining industry is currently going through it’s greatest legislative shake up in a generation, with India’s Government claiming that reforming the sector is vital for the country’s economic growth. We look at what India’s mining reforms could mean for the industry.

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Speaking at the Global Mining Summit in December 2020, India’s Minister of Mines Pralhad Joshi reaffirmed the nation’s commitment to “structural reforms” to its mining sector, “to increase participation of the private sector in mineral exploration and redefine the norms of exploration for auction of mineral blocks, to ensure a seamless transition from exploration to production”.

India’s mining industry forms a major part of the nation’s economy, both in terms of its own contribution to GDP and its supplying the raw materials that underpin India’s considerable manufacturing and infrastructure industries. India is home to the fourth largest coal reserves in the world and also hosts significant sources of bauxite, diamonds, and titanium ore. 

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Why is India’s mining sector important?

India has ambitious plans for economic growth. Addressing the World Economic Forum in January 2018, Indian Prime Minister Narendra Modi expressed his driving desire: to make India a $5tn economy by 2025. It was a claim optimistically restated towards the end of 2020, following what could be considered a slight stumbling block to economic growth in the form of the Covid-19 pandemic.

“Today, our country is optimistic of the future, it is optimistic of reaching the $5tn target,” Modi said during an interview with India’s Economic Times . 

“India is the third largest economy in terms of purchasing power parity. We want India to become the third largest in terms of current US dollar prices as well. The $5tn target will help us achieve that.”

It’s a bold target – becoming a $5tn economy in 2025 would require almost doubling the size of India’s economy in just five years – and it’s a target that the mining industry must play a key role in. The mining sector’s contribution to India’s GDP has been diminishing in recent years, which the Federation of Indian Mineral Industries attributed to the under-exploration of the nation’s “obvious geological potential” and a decreasing expenditure on exploration activities in the country.

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Joshi said that the mining industry will be core to reaching the $5tn goal, both in terms of its direct contribution to GDP as well as its ability to grow downstream industries and employment. But growing India’s mining industry to a point where it can support a wider push for rapid economic growth requires hefty capital investment from private players, underpinned by renewed support from the state.

Why are changes needed?

India’s mining law has remained relatively unchanged since the initial legislation governing the sector was introduced in 1957, with the Mines and Minerals (Development and Regulation) Act, or the MMDR Act. MMDR provides a regulatory framework that categorises minor minerals – those governed by state governments in accordance with delegated powers – and major minerals, the commodities overseen by India’s Central Government. Minor minerals include stones for building, clay, and sand, whereas major minerals include all minerals other than mineral oils, petroleum, and natural gas. 

The pursuit of rapid economic growth in the next five years will require a strengthening across all of India’s industries. Currently, India imports coal from countries such as Australia, Indonesia, and South Africa – despite being host to globally significant sources of the fossil fuel itself. The country has already begun to open commercial coal mining to private players, in a move that will aim to keep coal imports at a low level and strengthen domestic production.

More general reforms to the mining law will hope to foster this competitiveness between public sector undertakings and private projects more broadly across the sector – something that has been missing from India’s industry. 

“Our aim is to encourage industry players to adopt sustainable technology solutions including green mining, coal ash ponds, and other newer technology vehicles that can further accelerate the productivity with the economy of scale and also better environmental performance,” Secretary at the Ministry of Coal Anil Kumar Jain told a virtual CEO roundtable in November 2020.

What changes are being made?

India is moving quickly with plans to revamp its mining sector. The flurry of reforms proposed include amending two provisions in the MMDR Act that would free up around 500 potential mining sites that have been rendered inaccessible by existing regulatory frameworks. 

Under current legislation, these potential leases have either surpassed the legal timeframe for the granting of a mining lease or cannot be reallocated at auction due to legislative red tape. These moves would essentially streamline the transition process between the various stages of mine development work, from exploration right through to production. 

There are further proposals to create a better statutory definition of illegal mining. Previously, there has not been a distinction between illegal mining done outside a leasehold area and mining in violation of approvals and clearances within a mining lease area. Under new amendments, illegal mining and the government’s powers in tackling the practice will only apply to mining committed outside a lease area, rather than mining that breaches regulations within an otherwise permitted lease area.

Who wins, and what are the concerns?

India’s cabinet approved the mining reforms at a cabinet meeting in January 2021 chaired by Modi. The winners, simply, are mining companies. These reforms are largely targeted at streamlining the processes and opening up more sites in India to mine, while also levelling the playing field between private enterprise and state-owned endeavours. 

Government-backed companies will be charged levies on the extension of mining leases, and the reforms also pave the way for the reallocation of non-producing blocks owned by government companies.

The changes to the definition of illegal mining also provide a somewhat controversial boon to mining companies. India’s mining law enables the government to recover 100% of the value of illegally extracted minerals. 

Mining within a lease area will become exempt, meaning any violation within that area, be that over-extraction beyond the mining plan or otherwise, will no longer be considered illegal mining in the same sense. Critics fear this could be abused, with private enterprises potentially facing little pushback on poor environmental records or over-extraction.

The government has repeatedly pledged that these reforms will reduce environmental damage from the mining industry and will embed sustainability at the core of all operations. It hopes that a more competitive industry will stimulate innovations and promote the use of new technologies to enhance sustainability. 

Modi’s government has also been criticised for proceeding with such sweeping reforms to the mining industry with minimal consultation. Proposals were publicly released in late August 2020, with the notice from the Ministry of Mines inviting comments from the public, states and territories, industry, and other stakeholders – but the timeframe given for feedback was just 10 days.

The Mineral Inheritors Rights Association, formed in March 2020 to push for transparency and accountability in India’s extractive industries, asserted that the 10-day period was a violation of India’s Pre-Legislative Consultation Policy.

“We are anguished to note that only 10 days have been provided for the proposed mining reforms that… would have huge implications across the country,” the association said in a statement. “What is even more disturbing and dangerous is that the state governments have not yet been consulted and a 10-day period for the states to respond undermines the federal spirit of this nation.”

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India tax insights - issue 18, by opening up the sector to encourage more private players for commercial mining and revenue sharing, the measure of mining efficiency will shift from total tonnage of mined coal to profit/hour of mining outputs..

F or many years, the Indian policy structure on mining industry has largely been driven to ensure adequate checks and balances to prevent misuse of precious mineral deposits, reckless land acquisition and deforestation. A right policy framework would encourage sustainable environmental balance, being fair in handing over mining leases to the right businesses with the objective of maximising GDP of the country, create new jobs and enable the government to earn precious revenue through ad-valorem royalties on mined outputs. The policies have evolved over the years, more so in the line to keep certain sectors globally competitive, such as manufacturing, power, cement, steel, aluminium, among others.

As a result, there has been an improvement in the performance of the associated sectors over the last few years. India is one of the top five global miners in the world and is one of the largest producers of coal, steel, aluminium and zinc. Today, the country is producing more power than what it is consuming and has a per capita power consumption of 1181 kWh1, increasing year-on-year at the rate of 12.23%. Despite all such achievements, the current government thought it wise to make several changes in the way the mining gets governed and managed in the country. 

The latest reforms in the mining sector essentially cover the rules of bidding for mining rights (i.e. participation and process, permitting commercial mining, etc.) and new economics of future cash generation for State and bid winner (related to pricing, revenue sharing, market access and stamp duty payment, incentivizing output and productivity of mining operations). The reforms also envision an investment of INR 20000crs for building the necessary infrastructure that can further enhance the mined outputs.

The mining sector contributes about 3-4% of the GDP of the nation. Hence, this sector is of strategic importance to India with the sheer impact it can have on the overall GDP, foreign exchange earnings and its capacity to create a competitive leverage for other vital sectors such as power, construction, infrastructure, and consumer durables for securing their key raw materials at competitive rates. India holds large reserves (more than 9% of world total) of coal and iron ores, the value of which is slowly getting eroded as global utilities, and hence, the market value of coal and iron ore will drop in the coming years on account of increasing global emphasis on de-carbonization of power and metals value chains, investments in renewables and adoption of recycled steel/metal as a preferred, cost-effective and environment-friendly route to manufacturing. By opening-up the sector to encourage more private players for commercial mining and revenue sharing, the measure of mining efficiency will shift focus from total tonnage of mined coal to profit/hour of mining outputs. This in turn will attract investments for latest technology adoption, particularly in exploration and production process and it will also bring in other digital interventions for enhancing rates of pit head evacuation.

India’s past experience in dealing with such reforms and institutional changes have happened in sectors such as airlines, banking, telecom, power, infrastructure to name a few, and it has particularly taken place when the government realized that their capacity to rapidly invest capital and to scale operations efficiently were in the way of the expected demand, set by the GDP growth of the country. The results are for everyone to see. Calibrated experiments for commercialization of Indian railways, oil and gas sector and some other key sectors is also on-going. We will have to wait and see how these shapes up in the near future. Having said that, there is lot to learn from the mining reforms in countries like Russia, Australia, US, Indonesia - the other large coal mining countries in the world. What we can learn from these countries are the different reform processes, the execution procedure and the end-results. Overall, without going into the fine print, directionally, the governance framework of mining in such countries are in the lines of building speed, efficiency and productivity, which are closer to what have been proposed for India now.

As we move from the ‘Now’ to the ‘Next’ and ‘Beyond’ phase, the need for mining is not going anywhere. Some of the key points that the miners need to keep in mind when they bid, include – having a clear medium to long term strategic intent, getting as much data as possible on the mine that they bid for, and having a deep understanding of economics of the mine through its life including costs of ‘flipping’ or ‘mine closure’. Miners should choose mine blocks with appropriate size, relevant quality, considering the stage of development, ensuring that the statutory clearances are approved, which fits their pocket size, and most importantly understanding the underlying risk and that rightly fits in the existing portfolio of the miner’s business. However, there will be trade-offs to make on each mine block on several parameters of return-on-investment (ROI). Mining management is a specialized science, the need for specialized engineering, technological and digital investments for meeting the assumed costs and revenue profile and hence the ROI of the mine, should not underestimated. Miners need to further ensure that there is a demand side lock-in for at least 60% - 65% of the output of scheduled mine plan and look for hidden risks/costs of operationalizing the block (i.e. land availability, impact on the hydrological cycle, labour availability and productivity in the region, forest approvals, among others. Last but not least, avoid the winners curse and hubris on the auction. There are penalties for the miners if they are unable to meet a threshold requirement of coal outputs from their respective reserves. For seasoned miners, seeking to build additional security of supply, these enclosed points may not be new but for the first time commercial miners, they will need to plan diligently and have clarity on these aspects before they bid for mines.

Given the prior experience of this country with regard to mining, the key concerns of commercial miners will largely stem from the uncertainty involved in such projects/investments from the time of acquisition to the date of operationalization. This in turn is a function of time taken for clearances, land acquisition and availability of accurate data on exploration and mine plans. The government has to work overtime to eliminate such hitches. The experience of the private mining community in the first auction of 41 blocks of mines is going to be crucial to determine the valuation of the remaining 400 odd blocks for coal. We are only three weeks away.

[1]. Source: Power sector analysis by Central Electricity Authority, Government of India

(The article first appeared in The Financial Express on 2 July 2020.)

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The reforms also envision an investment of INR 20,000 crore for building the necessary infrastructure that can further enhance the mined outputs.

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Mining industry in India - statistics & facts

Economic contribution of india's mining sector, indian mining companies, commercial coal mining, key insights.

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GLOBAL MINING INDUSTRY

The worldwide mining market is predicted to increase at a CAGR of 12.4% over the next five years. The mining market is made up of businesses (organisations, sole traders, and partnerships) that sell minerals, metals, and other precious commodities such as sand and gravel, coal, and stone that have been removed from the earth’s crust. Mining services, general minerals, stones, copper, nickel, lead, and zinc, metal ore, and coal, lignite, and anthracite are all segments of the mining market. The mining market is projected to be driven by government policies that assist the mining industry. Governments are subsidising the mining industry and encouraging foreign direct investment (FDI). The amount of government support includes investment in mining projects by government-owned public finance institutions such as bilateral development banks and export credit agencies, fiscal support through budget allocations and tax exemptions, and investments by majority-owned mining and utility companies. These government initiatives will continue to assist the mining industry’s expansion. To provide clean and sustainable electricity, power generation businesses are increasingly turning to alternative energy sources such as natural gas, nuclear power, and renewables. The falling cost of installing renewable energy sources is also encouraging their adoption for power generation. The demand for coal in power generation is projected to be restrained as a result of this.

ENTREPRENEURIAL OPPORTUNITIES

In the previous five years, the Asia-Pacific area has experienced numerous investments, new capacity increases, and new exploration start-ups. Countries like China, Australia, India, and Indonesia, in particular, have been particularly active in the mining industry and are likely to drive the Asia-Pacific market at the fastest rate of growth compared to other regions. The mining industry is predicted to grow steadily in the future years, as demand for natural resources continues to rise. In recent years, higher GDP growth rates and new development zones in some regions have also aided the industry’s expansion.

INDIAN MINING SECTOR

With the central government’s approvals for pending mining reforms due in January and attempts to boost total mineral output ongoing, the country’s mining sector is projected to experience “hectic activities” in the New Year, which will be a “bridge year between the past and the future.” There is a lot of room for increased mining capacity in iron ore, bauxite, coal, and other minerals, as well as a lot of room for future sub-surface deposit discoveries. Infrastructure projects continue to offer steel, zinc, and aluminium producers significant economic prospects. The real estate industry relies heavily on iron and steel. The mining sector in India is predicted to increase. The mining sector plays a critical role in supplying the daily needs of the average person and contributes greatly to a country’s industrial and economic progress. The metals and mining business in India is growing due to increased infrastructural development and automobile manufacture. Mining leases for a period of 50 years have been awarded in India, which has a tremendous mineral potential. In the steel and alumina industries, India has a competitive advantage in terms of production and conversion costs. Its strategic location allows for the development of export potential as well as fast-growing Asian markets. Growth is being fueled by an increase in infrastructural construction and automobile manufacture. The power and cement sectors are also contributing to the sector’s growth. Given the excellent development prospects for the residential and commercial construction industries, demand for iron and steel is expected to continue.

TOP PLAYERS WORLDWIDE

• BHP Billiton Ltd
• Glencore Plc
• Rio Tinto Group
• National Mineral Development Corporation
• Hindustan Zinc
• Hindustan Copper
• Hindalco Industries
• Bharat Aluminium Company
• Rajasthan State Mines and Minerals
• Gujarat Mineral Development Corporation

Reports & Books

Suggested business ideas for entrepreneurs.

• Agriculture Grade Lime, FCC Grade Lime)
• Alumina from Bauxite
• Alumina from Gibbsite Variety
• Alumina Refinery
• Bauxite Calcination (by Rotary Kiln with Fine Grinding Ball Mill)
• Beneficiation of Chromium, Nickel and Manganese Ore
• Bentonite (Quarrying, Processing & Exporting)
• Bentonite Clay Granules
• Calcined Bauxite
• Calcined Bauxite through Rotary Kiln
• Chromite Beneficiation Plant
• Clay and Sand Bricks Plant (Light Weight)
• Coal Mining
• Concentrated Manganese Ore
• Crushed Stone
• Diamond & Gem Cutting / Polishing
• Ferroalloys of Niobium, Molybdenum, Titanium, Tungsten and Vanadium
• Granite Aggregate Trading Business for Export
• Granite Block Cutting
• Granite Cutting and Polishing
• Granite Mining (E O U)
• Graphite Mining and Processing
• Gypsum Mining for Production of Plaster of Paris Powder
• Hematite from Iron Ore, Lumps
• Iron Ore Mining
• Iron Ore Mining (E O U)
• Iron ore Pelletization
• Kaolin (Paints & Cosmetic Grade)
• Lime from Limestone (Technical Grade Lime, Refractory Grade Lime,
• Litharge (Yellow Lead Oxide Barton Pot Process)
• Low Ash Metallurgical Coke Plant
• Magnesium Metal
• Metallurgical Coke Plant for Coking Coal
• Mild Steel Ingots from Iron Ore
• Mining of Mineral Ore with Processing and Beneficiation for Production of Red Iron Oxide
• Precipitated Calcium Carbonate
• Quartz Slabs
• Red Iron Oxide
• Red Iron Oxide (With Mining of Mineral Ore Along with Processing and Beneficiation)
• Roasted Bentonite Granules
• Sponge Iron
• Sulphur Milling
• Trading of Iron Ores

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India plans to triple underground coal mining to meet energy demand

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India is seeking to revive underground coal mining as it tries to boost production to meet the country’s fast-growing energy needs despite international pressure to phase down use of the polluting fossil fuel.

“India is on a high-orbit growth trajectory, expanding industrially and economically,” Amrit Lal Meena, a senior official at India’s coal ministry, said in a statement to the Financial Times. “Coal continues to play a key role in India’s economic growth and development.”

The ministry has outlined plans to triple output from underground coal mines by 2028, preparing to auction new blocks, accelerate environmental clearance and roll out incentives to promote foreign investment and domestic equipment manufacturing.

India , the world’s second-largest coal producer after China, currently extracts 95 per cent of its coal from opencast mines carved into the surface, and relies on the fuel for about three-quarters of its power production.

But underground tunnel mining, which remains common in countries including China and Australia, has declined sharply in recent decades due to higher costs and risks.

The push to ramp up underground mining comes as India searches for new sources of coal to meet rising energy demand in what is now the world’s most populous country and the fastest-growing large economy.

Meena has previously described underground mining, which requires less land than opencast mines, as “eco-friendly”.

“There is little disturbance on the land and almost no land degradation,” he said in his statement.

Shweta Narayan, a climate campaigner at non-governmental organisation Health Care Without Harm, criticised that argument. “Ultimately you’re extracting fossil fuels, you’ll continue to burn them, so the harm to the environment continues,” she said.

India’s reliance on coal has proved a point of contention in international climate negotiations at the UN’s annual COP summits, which will resume on November 30 in Dubai.

At the COP summit in 2021, India signed on to an agreement to “phase down” coal . But even with an ambitious plan to triple renewable energy capacity by 2030, the coal ministry anticipates that India’s demand for the polluting fuel will rise from about 1bn tonnes last year to 1.5bn tonnes over the same period.

Increasing production from underground mines to 100mn tonnes by 2028 will help offset depletion at opencast mines and phase out imports, the coal ministry said.

Prime Minister Narendra Modi’s government argues that without major advances in renewable technologies such as battery storage, India lacks an alternative to the cheap and available fuel source to provide energy security to its population.

It also argues that it is the responsibility of rich nations, which contributed the bulk of historic emissions, to stop polluting sooner.

India’s per capita coal consumption is half that of the US, according to data from the Centre for Social and Economic Progress (CSEP) think-tank, and many Indians continue to have only precarious access to power.

Rahul Tongia, a senior fellow at CSEP, said that encouraging enough interest in underground mine production to meet the government’s ambitious goal of tripling output would prove challenging.

New Delhi’s past attempts to attract private investment for new mines have had only limited success, in part because of a lack of appetite among companies reluctant to make long-term investments in the fossil fuel.

“Underground mining has declined severely, and that’s because of economics,” he said. “I wouldn’t go so far as to call it more environmental, but it’s certainly less disruptive to the surface area of the mines. It’s also far riskier, so that’s a trade-off.”

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Mining giant Anglo American to break up its sprawling business as it tries to fend off takeover

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LONDON (AP) — Mining giant Anglo American PLC plans to break up its sprawling worldwide business — including spinning off the DeBeers diamond operation — as it seeks to fend off a takeover and focus on minerals that are expected to boom amid the global shift to green energy.

London-based Anglo American said Tuesday that it would spin off its platinum business, sell a unit that produces coal used in steel production and “explore all options” to separate DeBeers from the parent company.

The moves will allow Anglo American to concentrate on the production of copper and iron ore, which together accounted for more than two-thirds of its profit last year. The company will also retain its crop nutrients business.

The announcement came a day after Anglo American rejected a sweetened takeover bid from rival BHP Group that valued the company at 34 billion pounds ($42.6 billion). That was about 9% higher that BHP’s previous offer.

“We are taking clear and decisive action to deliver value — safely, responsibly and reliably — in the long-term interests of our shareholders and other stakeholders, and to deliver the products that are so critical to enabling the energy transition and supporting improved global living standards and food security,” Anglo Chief Executive Duncan Wangled said in a statement.

Anglo American shares fell 2.8% to 2,632 pence in midafternoon trading in London on Tuesday. The stock had risen as much as 33% in the previous three weeks on speculation about a takeover.

The company is seeking to simplify its operations and boost returns for shareholders by focusing on a smaller range of products that are likely to benefit from the drive to reduce the use of fossil fuels and cut carbon emissions linked to global warming.

Demand for copper, a key component of electrical wiring, solar panels, wind turbines and electric vehicles, is expected to double by 2035, according to an analysis from S&P Global Market Intelligence.

Anglo American also says high-quality iron ore from its mines can help steel producers reduce carbon emissions, while the naturally occurring fertilizer the company produces can help boost crop yields and reduce emissions from agriculture.

Anglo American was the world’s eighth-biggest mining company last year, when it reported revenue of $30.7 billion. That was dwarfed by the $217.8 billion generated by Glencore, the world’s biggest miner.

Anglo American was founded more than 100 years ago to mine gold in South Africa and quickly expanded into diamonds, platinum and copper.

At the end of last year, the company had about 60,000 employees in 13 countries stretching from Australia to Peru.

The company owns 85% of De Beers, which produces about a third of the world’s rough diamonds and sells diamond jewelry. The remainder is owned by the government of Botswana.

South Africa remains at the heart of Anglo American’s business, with the company employing more than 36,000 people in the country at the end of last year.

Anglo American acknowledged the impact the reorganization plan could have on workers, promising to engage with “relevant stakeholders” and comply with all consultation requirements and local laws.

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Oyo hits pause on IPO plans, aims to refile post $450M loan refinance

The softbank-backed firm withdrew its offer document on 17 may as per a regulatory filing with sebi..

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• Oyo's initial IPO application in 2021 was returned in January 2023
• Oyo to refile for IPO after $450M loan refinance next quarter
• Founder Ritesh Agarwal owns 33% stake while Softbank owns 46%

Oravel Stays Ltd, the parent company of travel and hospitality giant Oyo, has decided to put a temporary halt on its plans to go public by withdrawing its draft red herring prospectus (DRHP) from the Securities and Exchange Board of India (Sebi).

According to a filing with Sebi, the Softbank-backed firm withdrew its offer document on 17 May. This is the second time that Oyo has withdrawn its IPO application.

The company intends to resubmit its papers for the initial public offering (IPO) once it completes the refinancing of its $450 million loan, a process expected to be finalised by the next quarter, reported livemint.com.

The refinancing will be carried out through the issuance of dollar bonds, with JP Morgan likely to lead the process, the report mentioned. The estimated interest rate for these bonds stands at around 9-10% per annum.

Oravel Stays took steps to reduce its debt burden in November by prepaying a substantial portion of its outstanding debt through a buyback process amounting to Rs 1,620 crore.

Approximately 30% of its $660 million outstanding Term Loan B was repurchased during this buyback, effectively reducing the loan balance to about $450 million.

Founded by Ritesh Agarwal, Oyo initially filed its preliminary IPO documents with the markets regulator back in September 2021, aiming to raise Rs 8,430 crore through the offering, which included a secondary offering of Rs 1,340 crore.

However, Sebi returned the draft papers, requesting various updates before resubmission.

Oyo's initial IPO application in 2021 was returned in January 2023, following which it made a revised filing for a considerably smaller IPO.

Originally proposing a $1.2 billion issue (approximately Rs 8,430 crore), its revised confidential filing aimed for an IPO that was 40-60% smaller.