Stifling Growth: Bottlenecks impeding deployment of mining technologies

Bottlenecks impeding deployment of mining technologies

India is endowed with vast reserves of metals and minerals, most of which are deep seated. Mining companies rely mostly on surface mining technologies for extracting minerals and as a result high-grade ores remain unexplored. In order to excavate minerals from the deepest layers of the earth, greater penetration of innovative technologies is required. Also, the lack of manpower and volatility in the prices of commodities necessitates that mining companies find automated and cost-efficient technology solutions that will enhance their productivity without affecting profit margins. The solutions need to be adopted right from the beginning of the mining process till the shipment of the ore to enhance the value chain.

Several smart technology solutions such as automated machines, online monitoring systems, internet of things, big data, drones, and virtual simulation technology are already gaining ground in the global mining industry. In India, however, the pace of adoption of these technologies continues to be slow due to several impediments. The lack of availability of a skilled workforce and insufficient investment in automation systems are the major constraints. As a result, the Indian mining industry is still labour intensive. Besides, mining players continue to fret over several other issues as well.

Key challenges

  • High cost of equipment procurement: The mining equipment industry is highly capital intensive and involves a long manufacturing lead time. The lack of adequate fiscal support from the government and soft financing by banks/financial institutions are the major impediments to procuring high-tech equipment. In addition, equipment manufacturers face the issue of high cost of borrowing and low depreciation rates (15 per cent). Banks and non-banking financial companies have a high stressed asset ratio of 26.8 per cent (as of March 2018) on account of exposure to the mining and quarrying sector. As a result, financial institutions have become extremely cautious in lending to projects related to the sector.
  • Short-term versus long-term costs and benefits: One of the key challenges in technology adoption in the country has been the focus on short-term costs versus longer-term realisation of benefits. The new technologies need large initial investments and provide returns on investments in varying lengths of payback periods. But the key to technology adoption is patience. Most of the time, mine developers are not sure if their investments will reap benefits in the long term and hence display indecisive tendencies when it comes to the purchase of certain newly introduced equipment. Further, companies fail to comprehend that the initial lower costs of purchasing equipment may lead to higher costs of maintenance and spare part procurements going forward.
  • Higher demand for low-cost, inefficient equipment: Equipment manufacturers in China, Korea and Hong Kong have been taking advantage of their lower cost of production. Rising imports of cheaper equipment is mainly due to export incentives given by the respective countries and India’s favourable import duty regime. As a result, technology innovations which are relatively expensive are sidelined. In order to protect the domestic equipment industry, the Indian Construction Equipment Manufacturers’ Association has urged the government to regulate the import of second-hand equipment.
  • Lack of skilled manpower: The lack of skilled labour is another challenge in adopting innovative technologies as they require precision and training for deployment. Mining companies face difficulties in recruiting and training labour for operating technologies such as virtual reality simulation models, drones and artificial intelligence.
  • Geotechnical difficulties: Geotechnical difficulties in coal mines in India such as gassiness of coal seams, hard-roof strata, thick intra-banded seams, steeply dipping seams and higher relative humidity present challenges in the adoption of technologies.


India needs to significantly scale up mining output to make the sector a major contributor to the economy as is the case in developed countries such as Australia and Canada. For this, investment in automated equipment, technologies for digital mapping and mine planning, and 2D/3D seismic surveys, artificial intelligence, etc. has become necessary. The aforementioned challenges thus need to be dealt with systematically to move towards smart mining. Also, in the wake of increasing mine accidents, it is high time that mining companies realise that greater penetration of technology is a precursor to ensuring the safety of workers in deep mines.