Indian Mining & Minerals Industry

The mining industry in India

The mining industry in India contributes greatly to its GDP and its share in the GDP stands at around 2.5%. Therefore, we can call it a major economic activity. If we take into consideration the GDP of entire industrial sector, the contribution of mining stands at a whopping 11%. As far as employment generation is concerned, this sector is responsible for creating around seven lakh jobs. India is among the top five producers of iron ore, bauxite, and sheet mica in the world. The total worth of India’s mining and metal industry is around US$110 billion. But, from time to time, Indian mining industry has been accused of environmental and human rights violations. In the recent past, mining industry is marred by numerous scandals and corruption cases, which run into billions of rupees.

Mineral production in India

There are various small operational mines in India and the number of these mines is reported to be around 2100, except petroleum, natural gas, minor minerals and atomic minerals. The maximum number of these mines is located in the state of Andhra Pradesh (350), Gujarat (300), Rajasthan (240), Madhya Pradesh (220), Karnataka (175), Tamil Nadu (150), Orissa (120), Jharkhand (105), Chhattisgarh (100), Maharashtra (85) and Goa (70). Together, these states are responsible for 94% of total mines in India. Production wise, these 11 states were responsible for 91.5% production of minerals.

The offshore areas are responsible for 26% of national mineral output. Orissa was second with 12% share. The sector was largely dominated in India earlier by the individual leaseholders and regional associations of mine operators. To promote the interests of mining and metallurgical production, and to address the issues faced by the mine operators, a federation was established in 1966 as a nonprofit body. The different issues faced by these associations and mine operators included issues related to exports, lease grants, tenors, renewals, taxation, labor, and production.

Federation of Indian Mineral Industries (FIMI)

This federation was named as the Federation of Indian Mineral Industries FIMI, which has 350 individual members and associations, at present. Various activities such as metal making, mineral processing, mining, cement and other related industries such as marble, stone, granite, and slate were included in the domain of this federation. It covered joint, private and public sectors in India. Except fuel mining, the federation represents the rest of mining activities in the country.

De-regularization and liberalization

Mineral production and processing is de-regularized and liberalized as far as recent achievements of FIMI in this sector are concerned. However, FIMI feels that de-regularization has not penetrated down to the state level. According to Indian Constitution, all fuels and minerals are the properties of the individual states. So, many of the development policies implemented by the federal government are not implemented by the individual states and concerned agencies. FIMI is working towards achieving this at implementing agencies’ level as well.

The Future Outlook

The mining industry in India is trying to improve its operational performance through managing its capacity utilization and by undertaking strategic joint ventures. Foreign funds flow is also expected for further development of exploration and mining. The government needs to implement investment friendly policies and create a regulatory framework, so that India can take advantage of the technology and capabilities of the global exploration giants. Strategic alliances should be built and the special mining regions should be developed for the growth of this sector.

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Last Updated: 02/01/14