Minerals and Metals
Background
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During the last five decades since Independence, the country has made significant strides in the field of mineral development. At the time of Independence the inventory of mineral resources was available only for a few important minerals like coal, chromite, manganese ore, bauxite, sillimanite, magnesite and gypsum. Immediately after Independence and consequent to adoption of Industrial Policy Resolution, the pace of mineral exploration accelerated. |
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Exploration continued not only over land, but also extended to offshore areas and seabed. In recognition of the sea-bed exploration work carried out, India was conferred the status of pioneer investor by the United Nations in 1982 alongwith France, Japan and USSR (erstwhile) and four multinational consortia. India is also the first country in the world to have secured registration of an off-shore mining site over an area of 1,50,000 sq.km in the central part of Indian Ocean.
Size
- India is rich in mineral resources with large reserves of several primary metal ores like iron ore, bauxite, chromium, manganese and titanium
- India has 13 billion tonnes of iron ore reserves - the 5th largest reserve base in the world
- 2.3 billion tonnes of bauxite reserves - the 4th largest reserve base in the world
- 160 million tonnes of manganese reserves – the 2nd largest reserve base in the world
- 57 million tonnes of chromium reserves – the 3rd largest reserve base in the world
- Indian deposits of bauxite and iron ore are among the best in the world in terms of quality and mineability.
Mineral Production in India
|
Mineral |
Production (MMT) 2005 |
World Rank |
|
Bauxite |
11.5 |
6 |
|
Chromite |
3.3 |
3 |
|
Iron ore |
140 |
4 |
|
Manganese ore |
2.0 |
7 |
Source : Indian Bureau of Mines
Structural Characterstics
· India has several advantages, making it an attractive destination for mining and value addition :
Ø Large quantity of high-quality reserves
Ø Low labour and conversion costs
Ø India is among the lowest cost producers of Steel and Alumina
Ø Large and growing domestic demand
Ø Strategic location: proximity to the developed European markets and the fast-developing Asian markets for export of Steel, Aluminium
· Mining has a large presence of public sector companies which account for over 80% of the total value of minerals produced
· Large integrated players with interests from mining to metallurgy and processing like SAIL and Tata Steel in steel and Hindalco and Nalco in aluminium, dominate the metal and mining industry
· While SAIL, Nalco, National Mineral Development Corporation (NMDC) and Hindustan Copper are the largest public sector companies, Tata Steel, Hindalco and Sterlite are the major companies in the private sector. Sesa Goa (a subsidiary of Mitsui) is one of the largest companies in mining and export of iron ore.
· Orissa, Jharkhand and Chattisgarh are the most mineral-rich states of India
· Orissa has over 50% of India’s bauxite reserves and over 20% of India’s reserves of iron ore policy
Policy
· The National Mineral Policy announced in 1990, entrusted the government with exclusive or predominant role in the exploration and development of 13 minerals of basic and strategic importance.
· Following economic liberalisation, the National Mineral Policy was revised in 1993 which dispensed with the role of the State in exploration and exploitation of 13 minerals and threw open the mining sector fully for private initiative, both domestic and foreign. Today, any foreign company registered in India can apply for a prospecting licence or a mining lease to the concerned State government.
· The Central Government also issued guidelines in October 1996 for grant of large areas for aerial prospecting to attract foreign investment in the mining sector. Royalty rates have been rationalised to make them comparable with international rates and new rates have been notified with effect from April 11, 1997.
· In all, 36 proposals for aerial prospecting over 51,000 sq.km area in Rajasthan, Gujarat, Maharashtra and Bihar have so far been cleared. Prospecting Licences have been granted to Indian Subsidiaries of prestigious International Mining Companies like BHP Mineral of Australia, Meridien Peak Resources of Canada, Metdist of UK, Phelps Dodge Corporation of USA and Rio Tinto of UK. Aerial prospecting has already been completed in 13,000 sq.km area in Rajasthan.
· 100% FDI is allowed under the automatic route for mining of metal ores. The Foreign Investment Promotion Board (FIPB) has so far cleared 48 proposals aggregating an investment of about Rs.3,095 crore of Foreign Direct Investment (FDI) in the mining sector.
Outlook
· Indian mineral production is expected to grow rapidly in the coming years – driven by growth in metal manufacturing
· Iron ore production is expected to grow at a CAGR of 10 - 12% over the next five years, in step with rapid growth in the steel industry
· Bauxite production is expected to double to over 23 million tonnes by 2010
· High growth expected in the consumption of manganese and chromium
· India has presents substantial mining opportunities across all metal ores, particularly, there is a large scope for additional investments in mining of Iron ore and Bauxite
· Estimated 82 billion tonnes of reserves of various metals leaves a large untapped potential
· While India has 7.5% of the world’s total bauxite deposits, aluminium production capacity is only 3% of world capacity, indicating the scope and need for new capacities
· Large integrated international metal manufacturers including POSCO, Mittal Steel and Alcan have announced plans for expansion in India
References: http://www.investmentcommission.in