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Overview of Minerals Sector |
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The metallurgical and mineral industries in India form the fundamentals of its industrial growth and development. India has a vast resource base spread throughout the country, which provides the basic raw materials for most of the industries. India produces a total of 84 minerals comprising 4 fuel, 11 metallic, 49 non-metallic industrial and 20 minor minerals. India has an estimated 85 billion tonnes of mineral reserves remaining to be exploited.
For the past three decades, the Indian mining industry has been progressing at an annual rate of 4 percent to 5 percent. The Indian mining industry currently employs over 1.1 million people.
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There are over 2,326 private and 292 public operating mines in India and the minerals and metals from these mines contribute about 16 percent in India's total exports. With the recent amendments and Provisions in MM(R&D) Act, October 1996, the minerals and mining sector, which was earlier reserved exclusively for the public sector, has now been opened up for the private sector and the investments in the industry are being encouraged. The Government of India is making efforts to boost up the activities like research and making the mining and mineral's industry more competitive.
India has around 20,000 known mineral deposits and the geological potential in this regard is very substantial. The mining sector in India has already reached a high level of development. The majority (about 80%) of the mines are concentrated in the seven states of Andhra Pradesh, Bihar, Orissa, Madhya Pradesh, Rajasthan, Gujarat and Karnataka. To the total mineral production, the public sector companies operating in the Indian mining industry contribute 100% of copper, diamond, lead, silver and zinc and lignite, 98% of coal, 60% of iron ore and 50% of manganese, bauxite, chromate and dolomite
Exports:
Minerals (both in raw and processed form) constitute a significant portion of India's exports trade.
Diamond (mostly cut) continues to be the largest constituent with 81% share of the Indian mineral exports.
Imports:
Crude oil is the largest constituent of imports with 42% (approx) share followed by diamonds (uncut).
Analysis of Indian Mining Industry
STRENGTHS:
1. With the aim of encouraging investment in mining industry in India, the government offers a wide range of concessions to investors engaged in the mining activity.
2. India is the world's largest producer of mica; third largest producer of coal and lignite; and also ranks among the top producers of iron ore, bauxite, manganese ore and aluminum.
3. The availability of cheap labour for the industry offers a major attraction to the global players.
4. India offers low labour and conversion costs.
5. India still has a large quantity of untapped high quality reserves.
6. India exports iron-ore to China and Japan on a large scale.
7. Strategic location: India's Proximity to the developed European markets and fast-developing Asian markets for export of steel, aluminum also offers an added advantage.
WEAKNESSES:
1. India still does not have properly developed infrastructure facilities in the sector.
2. The mining technology is often outdated.
3. Low innovation capabilities
4. Labor force is highly un-skilled and inexperienced.
5. High rate of accidents gives rise to a number of health and safety issues.
6. Lack of R&D efforts and training and development
Emerging Challenges in Mining Industry
Technological challenges The technology being used in India is outdated and needs to be brought up to date.
Environmental issues- The threats and effects on the environment due to the various functions of this industry constitute a growing concern.
Health and safety issues- The increasing number of accidents in the industry has posted a lot of health and safety issues for the workers in the sector.
CLASSIFICATION OF THE MINERALS AND MINING SECTOR
Minerals and mining sector can be broadly classified into two sectors:
OIL AND GAS INDUSTRY- Oil and gas industry broadly covers the exploration and mining of all the sources of power, i.e. crude oil, petroleum refining and its products like LPG, natural gas.
Oil and gas represent over 40 per cent of the total energy consumption in India. India is heavily dependant on imports to fulfill this demand. The Government of India has opened, increased and is encouraging foreign participation in the oil and gas sector. For the year 2000-01, out of the total mineral production of Rs. 568070 million, contribution of petroleum and natural gas was Rs 261319 million. Crude oil and petroleum products account for 35 percent of the total imports of India.
ONGC and RIL are the two major players in this industry and are neck on neck in terms of profit, market capitalization and competition. The investment in the sector is increasing at a tremendous rate and many new projects and expansion plans are in the pipeline.
METALS AND MINERALS INDUSTRY- Metals and minerals category includes all the atomic minerals, metallic minerals and non-metallic metals, ferrous minerals and non-ferrous minerals, industrial minerals and fertilizers minerals, i.e. minerals like gold, silver, diamond, iron, chromium, copper, lead, zinc, aluminium, mica, bauxite, graphite, tin, platinum, cobalt, limestone. India has a base of 61 non-fuel minerals.
India's production of minerals consists of 84 minerals comprising 4 fuel, 11 metallic, 49 non-metallic industrial and 20 minor minerals. For the year 2000-01, out of the total mineral production of Rs. 568070 million, contribution of metals and minerals other than petroleum and natural gas was Rs. 306751 million.
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