Growth and prosperity of a nation depends on the search,
development and management of its mineral resources. Minerals constitute
an important raw material and a valuable natural resource in the industrial
development of the country. Due to increased competition, liberalisation
and globalisation world-wide, the markets for minerals have been growing
both in diversity and magnitude terms.
The minerals and mining industry is a key segment of the
Indian economy, with India being highly endowed with vast mineral resources.
The country's accelerated growth rate warrants a rapid development of
the mining sector, on which most of the basic industries in the manufacturing
sector depend. Extraction and development of minerals are closely interlinked
with other natural resources like land, water, air and forest. Hence,
the management of this precious resource and its optimal and economical
use are matters of national importance.
Three kinds of mineral concessions are recognized in Indian
law. They are:-
- Reconnaissance Permit (RP) - granted for preliminary
prospecting of a mineral through regional , aerial, geophysical or geochemical
surveys and geological mapping.
- Prospecting License (PL) - granted
for undertaking operations for purpose of exploring, locating or proving
mineral deposit and
- Mining Lease (ML) - granted for undertaking
operations for winning any mineral. The main opportunities in the mining
sector are in the development and production of surplus commodities such
as iron ore and bauxite, mica, potash, few low-grade ores, mining of small
gold deposits, diamonds, platinum group of metals and other rare metals,
Under the Constitution of India, management of mineral
resources is the responsibility of the Central Government and the State
Governments in terms of the Union List and State List respectively. The
Central Government is the owner of the minerals underlying the ocean within
the territorial waters or the Exclusive Economic Zone of India, while
the State Governments are the owners of minerals located within the boundary
of the State concerned. The Central Government, in consultation with the
State Governments, formulates the legal measures for regulation of mines
and minerals in order to ensure basic uniformity in mineral administration
as well as to maintain the pace of development of mineral resources, in
consonance with the national policy goals.
At the Central level, the 'Ministry of Mines' is the nodal
agency for overall growth and expansion of minerals and mining sector.
It is responsible for survey and exploration of all minerals (other than
natural gases, petroleum and atomic minerals); for mining and metallurgy
of non-ferrous metals like aluminium, copper, zinc, lead, gold, nickel,
etc. as well as for administration of the 'Mines and Minerals (Regulation
and Development) Act, 1957' in respect of all mines and minerals (other
than coal, natural gas and petroleum). At present, the Ministry is having
two subordinate offices, namely:-
- Geological Survey of India (GSI), Kolkata - is one of
the biggest national survey organisations of the world and one of the
largest scientific organization of the country. It has been functioning
as a vital arm of the Ministry, providing basic and specialised information
on mineral resources as well as contributing to their development and
management. It seeks to collect, synthesize and update the data about
the sector on a continuous basis as well as refine the nation's geoscientific
information and knowledge. Such database is the basic source of accurate
and specialised geoscientific inputs to a wide spectrum of end users
covering Government/semi-Government agencies, multi-national and private
organisations involved in resource exploitation, research, education,
- Indian Bureau of Mines (IBM), Nagpur - is engaged in
the promotion of scientific development of mineral resources of the
country, conservation of minerals and protection of environment in mines,
other than coal, petroleum and natural gas, atomic mineral and minor
minerals. It performs regulatory functions, namely enforcement of the
Mineral Conservation and Development Rules, 1988, the relevant provisions
of the Mines and Minerals (Development and Regulation) Act, 1957, Mineral
Concession Rules, 1960 and Environmental Protection Act, 1986 and Rules
made there under. It provides technical consultancy services to the
mining industry for the geological appraisal of mineral resources, and
the preparation of feasibility reports of mining projects, including
beneficiation plants. It functions as Data Bank of Mines and Minerals
and publishes statistical periodicals.
The public sector undertakings (PSUs)
under the Ministry are:-
- National Aluminium Company Limited (NALCO),
- Hindustan Copper Limited (HCL), Kolkata and
Exploration Corporation Limited (MECL), Nagpur
While, there are three research institutions, which are autonomous bodies of this Ministry, such as:- Jawaharlal Nehru Aluminium Research Development and Design Centre
, Nagpur; National Institute of Rock Mechanics (NIRM)
and National Institute of Miners' Health (NIMH)
, Nagpur. The Ministry's science and technology programme
covers the disciplines of geology, exploration, mining and environment, bioleaching, beneficiation, rock mechanics and ground control and non-ferrous metallurgy. During the current year, 15 new projects have been received for consideration and there are 6 ongoing projects.
The Mines and Minerals (Development and
Regulation) Act, 1957, (MMDR Act) and the Mines Act, 1952, together with
the rules and regulations framed under them, constitute the basic laws
governing the mining sector in India. The MMDR Act, 1957 lays down the
legal frame-work for the regulation of mines and development of all minerals
other than petroleum and natural gas. The provisions of the Act and the
Rules are reviewed from time to time and harmonised with the policies
governing industrial and socio-economic developments in the country.
The Central Government have framed
the Mineral Concession Rules, 1960 for regulating grant of prospecting
licences and mining leases in respect of all minerals other than atomic
minerals and minor minerals. While, the State Governments have framed
the rules in regard to minor minerals. The Central Government have also
framed the Mineral Conservation and Development Rules, 1988 for conservation
and systematic development of minerals. These are applicable to all minerals
except coal, atomic minerals and minor minerals.
In pursuance of the reforms initiated
by the Government of India in 1991, the Ministry had formulated the National
in 1993 and offered several incentives and concessions
to the investors. The policy recognized the need for encouraging private
investment, including foreign direct investment and for attracting state-of-the-art
technology in the mineral sector. The basic objectives of the mineral
policy are to:-
- Explore for identification of mineral
wealth in the land and in off-shore areas.
- Develop mineral resources taking
into account the national and strategic considerations and to ensure
their adequate supply and best use keeping in view the present needs
and future requirements.
- Promote necessary linkages for smooth
and uninterrupted development of the mineral industry to meet the needs
of the country.
- Promote research and development in
- Ensure establishment of appropriate
educational and training facilities for human resources development
to meet the manpower requirements of the mineral industry.
- Minimise adverse effects of mineral
development on the forest, environment and ecology through appropriate
- Improve the investment climate for
mining in the country and
- Ensure conduct of mining operations
with due regard to safety and health of all concerned.
In furtherance of the objectives of
the National Mineral Policy, the MMDR Act, 1957 has been amended twice
in 1994 and 1999. The Mineral Concession Rules, 1960 (MCR) and the Mineral
Conservation and Development Rules 1988 (MCDR), framed under the MMDR
Act, 1957 have also been modified. Salient features of the amended mining
legislation are as follows:-
- There is no restriction on foreign
equity holding in mining sector companies registered in India.
- There is a greater stability of tenure
of mineral concessions, since the minimum period of a mining lease is
twenty years and a maximum period of thirty years. A mining lease may
be renewed for a period not exceeding twenty years and may again be
renewed for a period not exceeding twenty years in respect of minerals
specified in Part C of the First Schedule of the Act (MMDR Act). In
respect of minerals specified in Part A and B of the First Schedule
of the Act, such renewal may be granted with the previous approval of
the Central Government. The period of prospecting license now is three
years, with possibility of renewal for a further period of two years.
- Thirteen minerals like iron ore, manganese
ore, chrome ore, sulphur, gold, diamond, copper, lead, zinc, molybdenum,
tungsten, nickel and platinum group of minerals which were reserved
exclusively for exploitation by the public sector, have now been thrown
open for exploitation by the private sector.
- With the 1999 amendment, a concept
of reconnaissance operations, as a stage of operation distinct from
and prior to actual prospecting operations, was introduced. The period
of reconnaissance permit is three years. A reconnaissance permit holder
enjoys preferential right for grant of prospecting licence.
- In 1994, fifteen minerals were removed
from the list of minerals included in the First Schedule to the MMDR
Act, 1957. With further amendments in 1999, the mineral limestone was
deleted from the First Schedule, and permission of the Central Government
is now required for grant of mining lease, prospecting license, and
reconnaissance permit in respect of only ten non-fuel and non-atomic
minerals. These minerals are asbestos, bauxite, chrome ore, copper ore,
gold, iron ore, lead, manganese ore, precious stones and zinc.
- State Governments have been delegated
powers to grant mineral concessions even for areas which are not compact
or contiguous. They also have been empowered to permit amalgamation
of two or more adjoining mining leases.
- Time limits have been prescribed for
conveying a decision on applications for mineral concessions, such as
six months for reconnaissance permits, nine months for prospecting licences
and twelve months for mining leases, etc.
Such policy framework and its subsequent revision has further opened up the sector and increased the inflow of domestic and foreign investment. Foreign Direct Investment (FDI) policy in the mining sector has been gradually liberalized over the last few years. FDI cap for exploration and mining of diamonds and precious stones have been increased to 100% under the automatic route. Also, FDI in the mining sector for all non-atomic and non-fuel minerals have now been fully opened upto 100% through the automatic route, including diamonds and precious stones.
After the introduction of the concept of reconnaissance permit, 263 reconnaissance permits covering an area of 3,62,217.322 square kilometers have been granted till 31.12.2007, of which 56 reconnaissance permits for an area of 76482.58 square kilometers were granted during the year 2007-2008. The States for which reconnaissance permits have been approved are Rajasthan (48), Andhra Pradesh (47), Karnataka (43), Chhattisgarh (29), Odisha (24), Madhya Pradesh (41), Uttar Pradesh (14), Gujarat (4), Jharkhand (3), West Bengal (3), Haryana (1), Kerala (1), Arunachal Pradesh (1), Maharashtra (3), Manipur (1).
However, the demand growth for metals and minerals, domestic as well as global, is continuously pushing up the prices. In India, the Wholesale Price Index for non-fuel minerals (base year 1993-94=100) stood at 429.8 in August 2007 and the corresponding index for August 2006 was 424.5. The minerals included in the Wholesale Price Index are bauxite, chromite, iron ore, manganese ore, asbestos, barytes, dolomite, felspar, fireclay, fluorite, gypsum, Kaolin (china clay), limestone, magnesite, ochre, phosphorite, silica sand, steatite, and vermiculite. The Wholesale Price Index for metallic minerals was 622.7 in August 2007 as compared to 618.2 in August 2006 and that of other minerals was 125.2 in August 2007 as compared to 118.7 in August 2006.
In order to encourage greater investment
in exploration and mining as well as remove bottlenecks which hinder the
productivity and efficiency of this sector, the Planning Commission has
set up a 'High Level Committee' under the Chairmanship of Shri Anwarul
Hoda, Member, Planning Commission. The Committee aimed at reviewing the
National Mineral Policy and recommending possible amendments to the MMDR
Act, so as to attune them to the present requirements of the world economy
for evolving of mining code adapted to the best international practices,
streamlining and simplifying of procedures for grant of mineral concessions
to reduce delays, strengthening the infrastructure for mining activities,
etc. Some of the other terms of reference of the Committee are to:-
- Suggest the changes needed for encouraging
investment in public and private sector in exploration and exploitation
- Review the procedures for according
clearance to mineral exploration and mining projects under the Forest
(Conservation) Act, 1980 and Environment (Protection) Act, 1986, and
suggest ways for speeding them up.
- prioritise the critical infrastructure
needs of the Indian mining sector and make recommendations on ways to
facilitate investment to meet these needs.
- Examine the implications of the policy
of mineral-rich States to make value addition within the State a condition
for grant of mineral concession and make appropriate recommendations
in this regard.
- Examine ways of augmenting State
revenues from the mineral sector and
- Examine any other issue relevant
for stimulating investment flows and inducting state-of-the-art technology
into the sector.
As a result of all such incentives and measures, the index of mineral production, excluding fuel and atomic minerals, (base year 1993-94=100) for the year 2007-08 is expected to be 170.39 as compared to 163.21 in 2006-07, showing a positive growth of 4.4 per cent. The total value of mineral production (excluding atomic minerals) during the year 2007-08 is estimated at Rs. 99,533.10 crores. During the same year, provisional value of fuel minerals account for Rs. 68,229.40 crores (69 percent of the total value), metallic minerals are estimated at Rs. 19,755.66 crores (20 percent of the total value); and non-metallic minerals (including minor minerals) are valued at Rs. 11,548.04 crores (11 percent of the total value).
The provisional value of export and import of ores and minerals, during the year 2006-07, was Rs. 80,912 crore and Rs. 3,05,028 crore respectively. Diamond (mostly cut) was the principal item of export during 2006-07, which accounted for 59.2 per cent, followed by iron ore with a contribution of 21.8 per cent, granite with a contribution of 5.8 per cent, alumina with a contribution of 2.3 per cent, precious and semi precious stones with a contribution of 1.0 per cent and chromite with a contribution of 0.98 per cent. Building and monumental stones, emerald, coal (including lignite), marble and bauxite were the other important minerals exported during the year 2006-07. While, petroleum (crude) was the main constituent of mineral import during the year 2006-07, which accounted for 69.9 percent of the total value of import of ores and minerals, followed by diamond (uncut) with 10.8 percent. Coal, coke, copper ores and concentrates, rock phosphate, sulphur and iron ore were the other important minerals imported during the same year.
Thus, mines are integral part of India's
industrial set up. They offer innumerable opportunities for exploring
and discovering various sub-surface deposits using modern techniques.
They are useful for the investors the world over for manufacturing several
value-added products. Therefore, it is imperative to achieve the best
use of available mineral resources through scientific methods of mining,
beneficiation and economic utilisation. Also, it is essential to keep
in view the present and future needs of the country and take all possible
steps to ensure indigenous availability of basic and strategic minerals
for meeting the global challenges.