The mining sector plays an important role in supporting industrial growth, and is thus considered an key determinant of economic growth. For the Indian economy, which is expected to register GDP growth rates of 7-8 per cent in the coming years, the sector’s contribution will be crucial. At present, the country produces 89 minerals and is among the top five producers in the world for many key minerals. Production-wise, over 80 per cent share is that of coal. In terms of value, mineral production for the year 2015-16 was estimated at Rs 2.69 trillion. Odisha, Rajasthan, Jharkhand, Andhra Pradesh and Chhattisgarh are the top mineral producing states.
Currently, the mining sector contributes only 2.4 per cent to India’s GDP, while its contribution to industrial GDP is approximately 10 per cent. It is estimated that a 1 per cent increase in mining and quarrying will result in a 1.2-1.4 per cent rise in industrial output, which, in turn will push overall GDP by 0.3 per cent. Thus, increasing mining output ranks high on the government’s agenda.
In addition to factors such as a supportive policy framework and sppedier grant of clearances, technology is a key determinant of overall output. In fact, technology adoption (leading to higher and more efficient production) has gained greater importance in recent times which have been marked by falling commodity prices, a trend that has forced mining companies to minimise costs.
In essence, efficiency and productivity improvements that aid in containing costs have become imperative in the country’s mining industry. These have led to a debate around the technologies to be used in the industry. For instance, the use of large capacity equipment versus smaller ones in coal mines has been at the forefront of mine planning discussions. While larger equipment provides scalability and safety, smaller ones are more fuel efficient. The debate is settled through mine planning technology, which determines the appropriate choice of equipment, depending upon the geotechnical parameters of the mineral deposit.
Technology in mining is utilised at two levels: at the first level, it is used for knowledge-based analysis and characterisation of mineral deposits, thus aiding in mine planning; at the second level, it helps in achieving operational efficiency. As minerals available at shallow depths have mostly been excavated, mining conditions and, therefore, technology requirements are changing fast. Deeper deposits, difficult geotechnical parameters, falling grades of ores, limited land availability, stricter norms for environmental risk mitigation and logistics issues are nudging companies back to the drawing board to chalk out fresh business strategies.
This scenario is further impacted by fluctuations in demand and prices. As a globally integrated industry, with equipment sourcing and product sales dependent on international markets, the country’s mining industry is exposed to foreign exchange risks as well, which, given the current level of volatility, can severely impact the feasibility of mining operations. Technology-driven flexible mining, therefore, is a necessity and the Indian mining industry is certainly moving towards greater technology adoption, albeit slowly.
Currently, there is inadequate focus on technologies for knowledge-based analysis and planning. The lack of availability of exploration data has been identified as a key constraint for mineral block auctions to be conducted by state governments. Further, the absence of data also hampers the process of mineral resource classification and due diligence for investment purposes. While advanced exploration technologies are widely available, factors such as policy, procurement methods and the weak financial position of companies prohibit their application. The penetration of state-of-the-art software platforms is also limited. Only free modules of software products such as CAE Datamine, Micromine, 3DS Geovia and Vulcan are used for resource assessment and mine planning by Indian miners, due to hesitation in making requisite investments.
With regard to the type of equipment, the industry is steadily moving towards larger capacity equipment. In opencast coal mines, the use of the shovel-dumper combination for overburden removal and coal winning is the new norm. In opencast metaliferrous mines as well, the shovel-dumper combination is common. In some projects, draglines are used for overburden removal and the shovel-dumper for coal extraction. Large capacity bucket wheel excavators have long been employed in lignite mines.
Surface miners, which are a part of continuous mining systems that load the overburden on to conveyors, are also being used. However, in India, surface miners are used along with pairs of front-end loaders and dumpers, which limit efficiency and productivity. Highwall mining has also been adopted in select mines of Central Coalfields Limited and Singareni Collieries Company Limited (SCCL), to improve coal recoveries from coal blocks.
The low contribution of underground mining operations continues to be a concern; it accounts for only 6-7 per cent of the country’s total mining output. This is partly due to technological challenges. Side-discharge loaders (SDLs) and load-haul-dump (LHD) loaders have been deployed in the country but their productivity is below par when compared to global benchmarks. The longwall mining experience in India has been mixed with only a few success stories from Eastern Coalfields Limited and SCCL. In underground metaliferrous mines, while global technologies and equipment have been deployed domestically, a comparative assessment shows that in terms of availability, productivity, utilisation and efficiency parameters they lag behind global benchmarks.
The selection of the right type of equipment is another key aspect, as it has significant financial implications (more pronounced in the case of underground operations). There is also the issue of a short-term versus long-term view, as investment in heavy equipment results in significant financial outflow right away, but yields returns only over a long period of time.
Apart from financial constraints, the low level of technology adoption has also been a result of complacency. Companies were able to reap high profits during the commodity super-cycle (2002-14). Further, high global prices coupled with lower costs of production provided little incentive to companies to invest in technological innovations.
The present situation, however, warrants heavy investments in technologically advanced equipment. This not only holds true for heavy, large-scale mining machines, but also for the back-end aspect – data analytics – which is almost non-existent in the mining space. Only about 1 per cent of the data generated from mining operations is utilised for further analysis. In fact, the remaining 99 per cent is now being termed as the new “unmined” resource, which, when brought online, will significantly aid in effective decision making.
To this end, the adoption of technologies for gathering extensive data and laying the groundwork for analytics must be considered. For example, the collection of data on equipment availability, breakdown and maintenance can help in moving from preventive to predictive maintenance practices. Digitisation of blasting data in consonance with geological information can help plan for selective blasting that targets ore fragmentation and reduces the breakage of waste rock.
Another strong case for technology adoption is energy efficient and sustainable operations. Mining activity degrades the environment in many ways. Unearthed areas with disturbed soil cover and the affected surrounding ecology leaves little scope for further use. Thus, the activity must be carried out responsibly and with techniques, such as blast-free methods, that minimise damage. With growing and legitimate stress on reducing the carbon footprint, energy efficient and environment-friendly equipment must be an obvious choice. Some mining companies have begun to consider investments in energy efficient equipment and devices. For gains in energy efficiency, some players have also invested in fuel management systems. These are driven by sensors and are backed by a sophisticated software backbone to enable the monitoring of fuel procurement, storage, distribution and usage in mining equipment.
In sum, the need of the hour is to consider investments in technologies for performance improvement in the mining segment. While these entail upfront financial outflows, the returns are guaranteed. Meanwhile, mega programmes launched by the government such as Make in India may prove to be fruitful if indigenous capacity for manufacturing mining equipment is established. Equally important would be to train personnel (say, through corporate programmes and government initiatives such as Skill India), so that the procured equipment is put to use in an efficient manner.