by Alok K Verma, Director- Mining Business, Hexagon India
Mining is backbone of Industrial growth of any country and India is not an exception. India is one of the richest countries having immense reserve of many major minerals including Fuel & Metal. Mining in India has legacy, however, country is still far behind many countries particularly in driving the growth in Mining Industry & use of latest Mining Technologies. For more than a decade, Indian Government is trying to focus and support Indian Mining Industry to take this on a rapid growth path by removing the hurdles, however, the challenges continued to be the same.
An estimate indicates that, there are 3500 plus Mining leases in the country that are in force across 23 states covering an area of about 317 K hectares. According to the various government data sources, India produces over 85 various minerals including Coal, Lignite, Iron Ore, Bauxite, Manganese, Chromite, Copper, Zinc & Lead, Limestone, phosphorite, Diamond, etc. Over the decades, the value of mineral production has also risen and, an estimate indicates it around Rs. 3.0 Trillion. Whereas India continue to be the second-largest producer and importer of Coal in the world.
Recent Changes & Developments in Industry
In last few years, there has been many changes & amendments in all related law, regulations. The Government is trying hard to support and give a boost to Mining Industry, especially Commercial Coal Mining, and bringing in reforms to attract more investment into the sector. The the direction taken by the government in its various announcements intended to revive the Indian economy following the pandemic (Covid-19). However, a boost to Mining brings with it associated predicaments such as land acquisitions & related conflicts, various community & habitation issues and moreover it’s impact on the environment.
If we see the flash back of last 2 decades, there has been multiple attempts by various Governments in the country for restructuring to boost Indian Mining Industry, when initially Coal Sector was opened for privatization and coal blocks were allotted to many private companies for captive Mining. Many domestic and overseas leading companies had shown sincere interest in Mining, however, only few of them succeeded. The Global companies who had come to India that time, eg, Thiess, Leighton & Rio Tinto, etc, struggled and probably lost interest in India Mining because of the various challenges. The political instability, frequent change in policies, laws & regulations, lack of alignment between State Government & Central Government has also contributed to some extent and is one of the reasons for slow growth of the industry.
Again, since 2014, the government has been working for reforms in mining sector. Bringing in auctions of Mining lease, formation of District Mineral Foundation (DMF), National Mineral Exploration Trust (NMET), Star Rating of Mining Leases to Establish Sustainable Development Framework (SDF), Extension of Mining Surveillance System (MSS) to Curb Illegal Mining Activities, etc, are the positive moves to bring big reforms in Mining. Many amendments were made to the related laws, rules & Acts including MMDR Act and new National Mineral Policy & an amendment in 2020. Some initiatives did not fire, however, the government retained its focus on reforms. The government over the last few months did a lot of groundwork to clear a path for easier allocation of blocks. Few months ago, In June 2020, while launching commercial coal mining in 41 coal mining blocks, Prime Minister said that India will turn the COVID-19 crisis into an opportunity and announced major steps in making the country self-reliant including the energy sector. However, looks like the government’s initiatives has not inspired much confidence in investors. While many companies have shown interest, but most of them wants a timing change because of pandemic and have sought extension of the auction by a few months.
Some of the Challenges in Indian Mining Industry:
Exploration of Mineral Resources
Although the Geological Survey of India (GSI) has covered entire country by systematic geological mapping, however, lot more is required to define the oblivious geological potential are identified. More focused approach is required for accelerating exploration especially targeting deep- seated and concealed mineral deposits over the OGP. The National Mineral Exploration Policy (NMEP) has been approved by the government and NMEP proposes to attract participation from private exploration agencies to expedite Exploration.
One of the keys & vilest effects of mining is the mass displacement of natives to other locations. Country like India is densely populated and when a new mining operation is commenced, there is always a requirement of shifting the villages, dwellings from one place to other, which also affects residents source of earnings be it from the agriculture, forest or any other local earning source. The people not willing to leave the native places, fear of losing the source of earning affects the land acquisitions thus delay in starting the mining operations. Many of the existing mines also face the similar challenges while expanding their operations.
Forest & Environment
The country’s major mineral area is under its richest forests and in the watersheds of its key rivers and the major minerals like Coal, Iron and bauxite, which are the mainstay of our mineral production, are mainly in the forest area. There are in fact, enough rules and laws to ensure that in areas where mining is being done, the environment is protected, water bodies are not polluted, mined-out land is reclaimed, and communities get justice, however, that continue to be a challenge. Getting such clearances either from Forest Departments or Environment departments are a herculean task for Mine owners & Operators.
Mining is high capital investment Industry where in the investments starts from securing a lease, land acquisitions, building infrastructure and investment on Mining operations which is Heavy Earthmoving Equipment and workforce, etc. The operating cost is mostly high because of energy, fuel and various another consumable. Nowadays most of the Mining Companies / Mine owners are moving towards deploying Mine Developer & Operators or Mining Contractors to reduce their investment and lowering the cost of operations. This model is working well, however, have their own challenges like the Mining lease owners remain liable for Statutory compliances, Legal & Social responsibilities and related liabilities.
Latest Technology &Modernization
Mining in India has a great legacy; however, the technological change and adoption of New & Digital technologies have always taken a back seat for some reason or the other. The key challenges in technology adoption in Indian Mining Industry have been more focus on Cost, Short term versus longer term realization of benefits. Mining Industry need to realize that in era of Globalization & in fast changing World, Efficiency, Productivity & Safety are going to be key in sustaining & business profitability in long-term. While the new technologies, mining methods, switching to large & new technology equipment & automation, might require high initial investments, however, they have returns on investments in varying lengths of payback periods and will be good for the industry in longer run.
Digitalization in Mining
World is moving towards Digitalization for better control on Mining Operation, efficiency, productivity, Safety and cost-efficient operations, etc. While all the leading Mining Countries in other continents are using digitalization for long and switching to newer technology much faster, the use of Digital Technology and Digitalization in India has taken a back seat and the progress on this front has really been slow. Now it’s high time to start giving a thrust to match the Indian Mining operations with Global standards and become at par in technology & to be competitive in Global market.
Now when World is moving towards SMART / Digital Mine and leading Global Technology Companies like Hexagon Mining are providing ‘End to End’ i.e. ‘Pit to Port’ digital solutions to Mining Industry right from Exploration, Geology, Mine Planning, Drilling & Blasting, Split Engineering, Fragmentation Analysis, Shovel & Conveyor Monitoring, Mining Equipment Fleet Management, Machine Control, Equipment Health Monitoring, Safety solutions Including Collison Avoidance System, Operator Alert Systems (OAS) / Fatigue Management Systems, Vehicle Intervention System (VIS), latest survey and monitoring equipment including, Total Stations, Scanners,Slope & Bench Monitoring Geo-Radar Systems, various Satellite Monitoring Solutions, Machine Control and in addition the solutions are also available for Enterprising (make use of Data) and to make the complete digitalization of entire Mining value chain. It’s the Industry how they look towards the future and how quickly Mining Industry able to adopt new & digital technology.
The way forward to help the Industry Grow
To support the rapid growth of Mining Industry the Government & Industry need to work together towards:
- Faster Exploration & Commercialization to unlock the reserve and reduce cost by enhancing production & supply.
- Reengineering the process of granting lease, permission & licenses - To reduce the time-to-value and related risk of Mine Operator / Developer
- Overcoming the traditional challenges like land acquisition, forest clearances, re-habitation, better coordination between Central & State Governments & departments for ease of clearance process and reduce the lead time of Mine lease allotment & starting the production.
- Faster decision making on all fronts & making the various licensing, approval & clearances process easier for Mine Operators
- More focused & Systematic approach to address mechanization, Modernization & Digitalization- Encouragement to the organizations who have capabilities to solve the challenges in Mining Operations
- Reduce the cost of Mining by use of technology, rationalization of taxes & duties, exports which would ultimately lead to enhancing production and increase in gross revenue.
(The views expressed herein are his personal views and not related to any company or organization.)