- The Mining industry in India is one of the core industries of the economy. It provides basic raw materials to many important industries.
- India has large reserves of Iron ore, Bauxite, Chromium, Manganese ore, Baryte, Rare earth and Mineral salts.
- India is 2nd largest crude steel producer in the World.*
- A major segment of iron & steel industry is the segment of secondary producers which contributes more than 40% to the production of crude steel. *
- Reasons to Invest
- India plans to achieve net zero emissions by 2070 in the steel sector. *
- India Targets 1.3 bn Ton Coal Production by FY25 and 1.5 BT bn Ton by 2030. *
- GOI aims to achieve a target of 300 Mn Tonnes of Steel capacity by the year 2030.*
- The vision of National Steel Policy 2017 is to increase steel production capacity in India to 300 mn tonnes by 2030-31, per capita steel consumption to 160 KG, reduce greenhouse gas emissions, many targets have been set.*
- Government has launched Coking Coal Mission to meet the demand of domestic coking coal as projected by the Ministry of Steel and has set target of 140 Mn for raw coking Coal production by 2030.*
- Government has launched coal gasification mission with a target to gasify 100 MT by 2030. Under this mission, Surface Coal/Lignite Gasification projects are being constructed.*
- Key Achievements
- Steel Authority of India Limited (SAIL) achieved the best ever annual production with 19.409 MT of hot metal and 18.289 MT crude steel production with a growth of 3.6% and 5.3% over previous best figures. *
- Overall Mineral Production Increases by 7.6% in June, 2023.*
- The index of mineral production of mining and quarrying sector for the month of June, 2023 (Base: 2011-12=100) at 122.3, is 7.6% higher as compared to the level in the month of June, 2022. The cumulative growth for the period April-June, 2023-24 over the corresponding period of previous year is 6.3% percent.*
- India’s largest iron ore producer, NMDC crosses 41 MT production of iron ore for the second fiscal in a row. *
- India’s overall coal production has gone up by 47% to 893.08 MT during the last nine years.*
- Recent Announcements
07th Aug 2023: Steady Increase in Royalty on Minerals to States over the years
02nd Aug 2023: Key Minerals Production Sufficient to Meet Domestic Users Demand
02nd Aug 2023: Parliament Passes Mines and Minerals (Development & Regulation) Amendment Bill, 2023
31st Jul 2023: Odisha gets Rs.23,120 Cr under district mineral foundation till 30th June 2023.
- Concerned State Governments have established DMFs in 626 districts in 23 states in the country under Section 9B of the MMDR Act, 1957. *
- Crude Steel Production Records 81.9 Million Ton. *
- Domestic Finished Steel Production stood at 78.090 Mn Ton against 73.02 Mn Ton during corresponding period last year. *
- Steel production (weight: 17.92 per cent) increased by 21.9 per cent in June, 2023 over June, 2022. Its cumulative index increased by 15.9 per cent during the quarter April to June, 2023-24 over the corresponding period of previous year.*
- Coal production (weight: 10.33 per cent) increased by 9.8 per cent in June, 2023 over June, 2022. Its cumulative index increased by 8.7 per cent during the quarter April to June, 2023-24 over corresponding period of the previous year.*
- Production level of important minerals in June, 2023 were: Coal 739 lakh tonne, Lignite 33 lakh tonne, Natural gas (utilized) 2845 million cu. m., Petroleum (crude) 24 lakh tonne, Bauxite 1991 thousand tonne, Chromite 399 thousand tonne, Copper conc. 9 thousand tonne, Gold 101 kg, Iron ore 229 lakh tonne, Lead conc. 33 thousand tonne, Manganese ore 303 thousand tonne, Zinc conc. 140 thousand tonne, Limestone 373 lakh tonne, Phosphorite 126 thousand tonne, and Magnesite 10 thousand tonne.*
- Important minerals showing positive growth during June, 2023 over June, 2022 include: Manganese Ore (27%), Magnesite (21.6%), Gold (18.8%), Chromite (16.6%), Iron Ore (14%), Limestone (10.7%), Coal (9.7%), Lead Conc. (7.6%), Natural gas (U) (3.6%) and Bauxite (1.9%). *
- Growth Drivers
- By 2030-31, it is envisaged to enhance the operational capacity of crude steel production of SAIL from existing 19.51 MTPA to around 35.65 MTPA. *
- Ministry of Coal has taken up 67 First Mile Connectivity Projects, which will be completed by 2027.*
- India and Australia hold bilateral talks on the Critical Minerals Investment Partnership and have identified five target projects (two lithium and three cobalt) on which to undertake detailed due diligence. *
- With an objective to enhance coal production capacity, the Ministry of Coal has recently put 141 new coal blocks for commercial auction.*
- Coal Ministry auctions a total of 29 Coal Mines in 6th round of auctions , having geological reserves of 8160 Mn Tonnes and estimated to attract capital investment of INR 11,250 crore. *
- Coal India Limited is adopting Mass Production Technologies (MPT) in its Underground (UG) mines, mainly Continuous Miners (CMs), wherever feasible. They have also planned working large numbers of Highwalls (HW) mines in view of the availability of Abandoned / Discontinued mines and moreover, planning large capacity UG mines wherever feasible. *
- FDI Policy
FDI up to 100% under the automatic route is allowed in:
- Mining and exploration of metal and non-metal ores including diamond, gold, silver and precious ores but excluding titanium bearing minerals and its ores; subject to the Mines and Minerals (Development & Regulation) Act, 1957.
- Coal and Lignite mining for captive consumption by power projects, iron and steel cement units and other eligible activities permitted under and subject to the provisions of Coal Mines Nationalization Act, 1973.
- Setting up coal processing plans like washeries subject to the condition that the company shall not do coal mining and shall not sell washed coal or sized coal from its coal processing plants in the open market and shall supply the washed or sized coal to those parties who are supplying raw coal to coal processing plans for washing or sizing.
Commercial mining, with a provision for 100% foreign investment, has also been allowed by the Government:
- Mining and mineral separation of titanium bearing minerals and ores, its value addition and integrated activities.
- Mining and mineral separation of titanium bearing minerals and ores, its value addition and integrated activities subject to industry regulations and the Mines and Minerals (Development and Regulation Act 1957).
- The cumulative FDI equity inflow in the Mining Industry is USD 3.43 bn during the period April 2000 to March 2023.*
- The cumulative FDI equity inflow in Coal Production is USD 27.73 mn during the period April 2000 to March 2023.*
- The cumulative FDI equity inflow in the Diamond, Gold Ornaments is USD 1.23 bn during the period April 2000 to March 2023.*
- The cumulative FDI equity inflow in the Metallurgical Industries is USD 17.23 bn during the period April 2000 to March 2023. This constitutes 3% of the total FDI inflow received across sectors. *
- Production Linked Incentive (PLI) Scheme
The Union Cabinet chaired by the Prime Minister, Shri Narendra Modi has given its approval to introduce the Production-Linked Incentive (PLI) Scheme in Specialty Steel for Enhancing India’s Manufacturing Capabilities and Enhancing Exports – Atmanirbhar Bharat.
Financial Outlay- INR 6,322 cr
Products: Coated Steel, High Strengh Steel, Steel Rails, A-lly Steel Bars & Rods
For more details on PLI Schemes, Click Here
- Sector Policy
- Ministry of Coal has formulated strategy to develop an integrated approach for eliminating road transportation of coal in mines and has taken steps to upgrade mechanized coal transportation and loading system under 'First Mile Connectivity' projects.*
- MCDR have been framed under section 18 of the MMDR Act, 1957. The highlights of amendments in the Rules are as follows:
(i) Rules prescribed that that all plans and sections related to mine shall be prepared by combination of Digital Global Positioning System (DGPS) or Total Station or by drone survey in relation to certain or all leases as may be specified by Indian Bureau of Mines (IBM).
(ii) New Rule inserted to provide for submission of digital images of mining area by lessees and Letter of Intent holders. Lessees having annual excavation plan of 1 million tonne or more or having leased area of 50 hectare or more are required to submit drone survey images of leased area and up to 100 meters outside the lease boundary every year. Other lessees to submit high resolution satellite images. This step will not only improve mine planning practices, security and safety in the mines but also ensure better supervision of mining operations.
(iii) Requirement of submitting satellite images obtained from CARTOSAT-2 satellite LISS-IV sensor on the scale of cadastral map deleted in view of the insertion of provision for submission of high resolution Georeferenced Ortho-rectified Multispectral satellite and use of drone survey as per Rule 34A.
(iv) Provision of daily return omitted to reduce compliance burden. Power of taking action against incomplete or wrong or false information in monthly or annual returns given to IBM, in addition to State Govt.
(v) Allowed engagement of a part-time mining engineer or a part-time geologist for category 'A' mines having leased area below 25 hectares. This will ease compliance burden for small miners.
(vi) In order to increase employment opportunity, diploma in mining and mine surveying granted by duly recognized institute along with a second class certificate of competency issued by the Director General of Mines Safety is added in qualification for full time Mining Engineer. Also, qualification for part time Mining Engineer added.
(vii) Penalty provisions in the rules have been rationalized. Previously, the rules provided for penalty of imprisonment upto 2 years or fine upto 5 lakh rupees or both for violation of each and every rule irrespective of the severity of the violation.
(viii) Provision of forfeiture of financial assurance or performance security of the lease holder added in case of non-submission of final mine closure plan within the period specified.
(ix) Amount of financial assurance increased to five lakh rupees for Category ‘A’ mines and three lakh rupees for Category ‘B’ mines from existing three and two lakh rupees, respectively.
- The MCR, 2016 has been amended to amend the Mines and Minerals (Development and Amendment) Act, 1957 w.e.f. 28.03.2021 with the objectives of increasing employment and investment in the mining sector, increase revenue to the States, increase the production and time bound operationalisation of mines, increase the pace of exploration and auction of mineral resources, etc.
The highlights of amendments in the Rules are as follows:
(i) New rules inserted to provide manner of sale of 50% of mineral produced from the captive leases.
(ii) Provision added to allow disposal of overburden/ waste rock/ mineral below the threshold value, which is generated during the course of mining or beneficiation of the mineral.
(iii) Minimum area for grant of mining lease has been revised from 5 ha. to 4 ha. For certain specific deposits, minimum 2 ha. is provided.
(iv) Part surrender of mining lease area allowed in all cases. Presently, part surrender was allowed only in case of non-grant of forest clearance.
(v) Rules amended to allow transfer of composite licence or mining lease of all types of mine.
(vi) New rules inserted to provide for mutation of ML/ CL in favour legal heirs on death of the lessee or licencee.
(vii) Interest on delayed payments revised from existing 24% to 12%.
(viii) Rules regarding period of mining lease granted to Government companies and their payments incorporated in the MCR, 2016.
(ix) Penalty provisions in the rules have been rationalized. Previously, the rules provided for penalty of imprisonment upto 2 years or fine upto 5 lakh rupees or both for violation of each and every rule irrespective of the severity of the violation. Amendment in the rules categorized the violations of the rules under the following major heads:
o Major Violations: Penalty of imprisonment, fine or both.
o Minor Violations: Penalty reduced. Penalty of only fine for such violations prescribed.
o Violation of other rules has been decriminalized. These rules did not cast any significant obligation on the concession holder or any other person. Thus, violation of 49 rules has been decriminalized.
(X) Rescission of two rules, have been notified namely, Minerals (Transfer of Mining Leases Granted Otherwise than through Auction for Captive Purpose) Rules, 2016 and Mineral (Mining by Government Company), Rules, 2015. Concession Rules, 2021 Notified
- The Government has amended the Mines and Minerals Development and Regulation Act 1957 (MMDR Act). The amendment removed discretion by instituting auction to be the sole method of grant of major mineral concessions and, thereby bringing in greater transparency. It also provided the much-needed impetus to the mining industry by deemed extension of mining leases. The Salient features of the recent amendments are:
- Mineral Concessions Grant Through Auctions to bring transparency and remove discretion.
- District Mineral Foundation (DMF) to address the grievances of the people affected by mining and in turn improve the image of the mining industry.
- National Mineral Exploration Trust (NMET) for incentivizing regional and detailed exploration to fill the gaps in exploration in the country.
- Mining Leases for 50 years and even the existing leases deemed extended eliminating any renewals for security of tenure.
- Stronger penal provisions have been put in place to check illegal mining. A penalty of up to (approximately) USD 7200 per hectare of the area and jail term of up to 5 years is the probable punishment for illegal mining.17
- National Mineral Exploration Policy 2019, the aim on the National Mineral Policy (NMP) 2019 is to have an effective, meaningful and implementable policy that brings further transparency, better regulation and enforcement, balanced social and economic growth as well as sustainable mining practices. The NMP 2019 focuses on the Government’s Make in India initiative and gender sensitivity in terms of its vision.21 The NMP 2019 aims to attract private investment through incentives while the efforts would be made to maintain a database of mineral resources and tenements under the mining tenement system.
- Hon’ble Prime Minister, Shri Narendra Modi has given its approval to introduce the Production-Linked Incentive (PLI) Scheme in Speciality Steel Sector through the Ministry of Steel of with a financial outlay of INR 6322 cr over a five-year period for Enhancing India’s Manufacturing Capabilities and Enhancing Exports – Atmanirbhar Bharat.
- Mission Purvodaya emphasized to harness the untapped potential of the region to fuel the next wave of national growth. The focus was on Eastern India towards self-reliance and contribution in the making of Aatmanirbhar Bharat. India’s annual per capita steel consumption is 74.1 kg and is one-third the global average (224.5kg). 28
- National Geoscience Data Repository (NGDR)37
Collation, assimilation, and integration of the data generated from the National Geoscience Data Repository and Geochemical, Geophysical, and Aero Geophysical Mapping Programs to identify more areas for mineral exploration.
- National Mineral Policy, 2019 inter alia provides that dedicated mineral corridors shall be planned to facilitate transport of minerals from mining areas in hinterland alongwith encouraging the local evacuation networks to be built in an integrated manner.
- Financial Support
- The Mines and Minerals (Developments and Regulation) Amendment Bill, 2021 proposes to develop the mining sector to its full potential for faster economic growth.
UNION BUDGET 2023-24
- Investment Opportunities
Post Auction Mining Clearances and Approvals Facilitator
Mineral blocks of non-minor minerals are being put up for auctions by the States for Mining or Prospecting cum Mining, depending on their level of exploration. The grant process is to be completely transparent through competitive bidding on an e-auction portal. An Inter-Ministerial Group, Post Auction Mining Clearances and Approvals Facilitator (PAMCAF) has been constituted which will expedite the requisite clearances to enable the early start of mining activity.19
National Mineral Policy 2019
The aim on the National Mineral Policy (NMP) 2019 is to have an effective, meaningful and implementable policy that brings further transparency, better regulation and enforcement, balanced social and economic growth as well as sustainable mining practices. The NMP 2019 focuses on the Government’s Make in India initiative and gender sensitivity in terms of its vision.20
The NMP 2019 aims to attract private investment through incentives while the efforts would be made to maintain a database of mineral resources and tenements under the mining tenement system.
- Sector Reports
- Ministry of Coal: Five Year Vision Document 2019-24
- Annual Report 2022-23: The Year at a Glance | Ministry of Coal
- Year End Review 2022: Ministry of Mines
- Year End Review 2022: Ministry of Coal
- OM dated 07.05.2022 on "Special dispensation for consideration of Environmental Clearance for 50% expansion in Coal mining projects, within the existing premises/Mine lease area, without additional land acquisition"
- OM dated 11.04.2022 on "Guidelines for Granting Environmental Clearance under para 7 (ii) (a) of EIA Notification, 2006, for expansion upto 50% within the existing premises / Mine lease area, without additional land acquisition"
- Foreign Investors
- BHP Billiton (Australia)
- Rio Tinto (Australia)
- De Beers (Anglo American)
- Australian Indian Resources (Australia)
- India Resources Limited (Australia)
- Ministry of Mines, Government of India
- Federation of Indian Mineral Industries
- Geological Survey of India
- The Indian Bureau of Mines
- The Aluminium Association of India
- Ministry of Steel, Government of India
- Ministry of Coal
- Indian Steel Association
- India Stainless Steel Development Association
- Coal Consumers Association of India
- "Mineral Production during March 2020 (Provisional)", PIB, https://pib.gov.in/PressReleaseIframePage.aspx PRID=1624315#:~:text=Production%20level%20of%20important%20minerals,582%20thousand%20tonnes%2C%20Copper%20conc.
- Summary of Union Budget 2020-21, https://www.pib.gov.in/PressReleseDetail.aspx?PRID=1601475
- “Mineral Resources Department”, Investment Opportunities, http://chhattisgarhmines.gov.in/en/investment-opportunities
- “Ministry of Mines”, National Mineral Policy 2019 approved by Cabinet, http://www.pib.nic.in/Pressreleaseshare.aspx?PRID=1566734
- Factsheet on FDI - April 2000 to December 2021, Department for Promotion of Industry and Internal Trade, https://dpiit.gov.in/sites/default/files/FDI%20Factsheet%20December%2C%202021.pdf
- “Ministry of Mines”, Monthly report https://coal.nic.in/sites/upload_files/coal/files/coalupload/13102020september.pdf
- PIB Release, https://www.pib.gov.in/PressReleasePage.aspx?PRID=1670977
- Ministry of Petroleum and Natural Gas, http://petroleum.nic.in/sites/default/files/cabsept20.pdf
- PIB Release, https://www.pib.gov.in/PressReleasePage.aspx?PRID=1671487
- “Ministry of Coal”, Monthly Report https://coal.nic.in/sites/upload_files/coal/files/coalupload/17112020october.pdf
- PIB Release, https://www.pib.gov.in/PressReleasePage.aspx?PRID=1673977
- PIB Release, https://www.pib.gov.in/PressReleasePage.aspx?PRID=1678327
- Monthly Summary, https://mines.gov.in/writereaddata/UploadFile/October%202020%20Monthly%20Summary01122020.pdf
- Monthly Summary, https://steel.gov.in/sites/default/files/monthly%20summary%20nov%2C%2020%20-pdf_compressed_0.pdf
- PIB Release, https://www.pib.gov.in/PressReleasePage.aspx?PRID=1685071
- PIB Release, https://www.pib.gov.in/PressReleasePage.aspx?PRID=1687683
- PIB Release, http://coal.nic.in/sites/default/files/2021-01/document18012021.pdf
- PIB Release, https://www.pib.gov.in/PressReleasePage.aspx?PRID=1692109
- PIB Release, https://www.pib.gov.in/PressReleasePage.aspx?PRID=1704810
- PIB Release, https://www.pib.gov.in/PressReleasePage.aspx?PRID=1706110
- PIB Release, https://www.pib.gov.in/PressReleasePage.aspx?PRID=1706560
- PIB Release, https://www.pib.gov.in/PressReleasePage.aspx?PRID=1707544
- PIB Release, https://www.pib.gov.in/PressReleasePage.aspx?PRID=1740728