In infrastructure sectors across the country, minerals form a basic foundational element. From 2013-14 to 2017-18, the majority of minerals including iron ore, lignite and bauxite displayed a mixed trend. In contrast, the upward trend in limestone and lead concentrates was hard to miss.
Indian Infrastructure presents a snapshot of mineral-wise trends in the past few years…
Coal
Coal reserves in India are found either in the Gondwana or tertiary coalfields. Total coal re-serves in the country stood at 319,020 million tonnes (mt) as of April 1, 2018. Of the coal re-serves, 99.5 per cent, amounting to 317,433 mt, were located in the Gondwana coalfields, while the tertiary coalfields accounted for only 0.5 per cent of the total coal reserves at 1,588 mt.
Production of raw coal increased by 2.7 per cent from 657.86 mt in 2016-17 to 675.39 mt in 2017-18. The share of coking and non-coking coal in total raw coal production has remained nearly constant with minor changes. Coking coal accounts for a 10 per cent production share while non-coking coal accounts for 90 per cent. During 2017-18, Coal India Limited (CIL) produced 567.4 mt of coal while Singareni Collieries Company Limited (SCCL) produced 62 mt of coal. Over 80 per cent of CIL’s coal and more than 83 per cent of SCCL’s coal offtake was by the power sector.
From 2013-14 to 2017-18, the share of opencast mining in total production remained constant at about 95 per cent while that of underground mining stood at 5 per cent. A state-wise analysis reveals that Chhattisgarh, Jharkhand and Madhya Pradesh accounted for over 55 per cent of the total coal production in the country during 2017-18.
Coal imports declined for two years (2015-16 and 2016-17) before picking up to 208.27 mt in 2017-18. Prior to that, coal imports had recovered to 217.78 mt in 2014-15 from 166.85 mt in 2013-14. The value of coal imports increased from Rs 1,002 billion in 2016-17 to Rs 1,384 billion in 2017-18. Non-coking coal accounts for almost 77 per cent of total coal imports in the country, with Indonesia being the key source. The power sector utilises most of the imported non-coking coal for blending with indigenous coal as well as to run imported coal-based thermal power plants.
Iron ore
Iron ore reserves stand at 33,276 mt as of April 1, 2015. Reserves comprise 22,487 mt of haematite reserves and 10,789 mt of magnetite reserves.
In 2017-18, the country produced 200.95 mt of iron ore, an increase of 4.61 per cent as compared to 192.08 mt the previous year. During the five-year period 2013-14 to 2017-18, iron ore production displayed a constant rise in production from 2015-16 to 2017-18 after experiencing a decline in 2014-15, recording its highest level in 2017-18. This decline in iron ore production may be attributed to the restrictions imposed by the government on mineral mining in Odisha and Jharkhand in 2014. A state-wise analysis shows that Odisha has the largest share of 51 per cent, followed by Chhattisgarh with a share of 17 per cent, Karnataka with 14 per cent, Jharkhand with 11 per cent, Goa with 4 per cent and Madhya Pradesh with 1 per cent. Other states including Rajasthan, Telangana, Maharashtra and Andhra Pradesh together account for 1 per cent.
During 2017-18, major iron ore producers were National Mineral Development Corporation Limited (35.57 mt), Steel Authority of India Limited (26.83 mt), Tata Steel (23.04 mt) and Odisha Mining Corporation Limited (7.92 mt). As of March 2018, the overall share of the public and private sectors in iron ore production by captive mines stood at 45 per cent and 55 per cent respectively, while for non-captive mines, it was 38 per cent and 62 per cent respectively.
Lignite
As of April 1, 2018, lignite reserves stood at 45,664 mt. Indicated reserves formed 58 per cent of the total reserves followed by inferred reserves (28 per cent) and proven reserves (14 per cent). Lignite reserves have been steadily increasing, from 41,963 mt as of April 1, 2013 to 45,664 mt as of April 1, 2018.
Lignite production has been highly volatile for the entire period from 2013-14 to 2017-18. Recovering to 48.27 mt in 2014-15 from 44.27 mt in 2013-14, it again dipped to 43.84 mt in 2015-16 before rising for two straight years, reaching 46.25 mt in 2017-18. As per the state-wise production trends, Tamil Nadu emerges with the highest production level of 23.56 mt, followed by Gujarat (13.39 mt) and Rajasthan (9.29 mt).
NLC India Limited is the country’s major producer of lignite with a share of 54.38 per cent. However, there has been a decline in the quantity of lignite produced by NLC as 25.15 mt was produced during 2017-18, which was 8.9 per cent lower than the production in 2016-17. Operational issues have been one of the key reasons behind this decline in production. NLC is followed by Gujarat Mineral Development Corporation Limited (GMDC) which accounted for 22.08 per cent of the total lignite production. More recently, Barmer Lignite Mining Company Limited (BLMCL) is emerging as one of the key producers of lignite. As compared to a share of about 8.47 per cent in total lignite production in 2013-14, BLMCL accounted for almost 13.54 per cent during 2017-18. This is partly due to the additional output from its Jalipa mine, in which operations commenced in November 2017.
During the period 2013-14 to 2017-18, considerable fluctuations have been recorded in dispatch with 2013-14 and 2015-16 displaying a significant decline. On the brighter side, lignite dispatches recovered in the subsequent two years and reached 45.92 mt in 2017-18 recording an annual increase of 6.4 per cent. The power sector accounts for the highest share of lignite dispatch among various priority sectors.
Bauxite
Total bauxite reserves stood at 3,897 mt on April 1, 2015. Of the total reserves, 656.42 mt fall under the reserves category while 3,240.44 mt are under the remaining resources category.
After increasing from 22.32 mt in 2013-14 to 22.49 mt in 2014-15, bauxite production declined by 12.3 per cent from 28.12 mt in 2015-16 to 24.66 mt in 2016-17. It reported a further decline of 9.5 per cent to 22.31 mt in 2017-18. A significant decrease in the import of Indian bauxite by China (due to price and quality issues) coupled with the tepid domestic consumption of aluminium has affected the overall production of bauxite in the country. State-wise, in 2017-18, Odisha accounted for more than half the total bauxite production with a share of 51 per cent. Gujarat accounted for a 14 per cent share, followed by Jharkhand (12 per cent) and Chhattisgarh (11 per cent).
National Aluminium Company Limited is the major producer, producing 7,025.1 thousand tonnes and 2,105.5 thousand tonnes of bauxite and alumina respectively during 2017-18. Vedanta Resources, Hindalco Industries and GMDC are other key players in the bauxite segment.
Other metallic minerals
Copper ore and concentrates: Copper ore reserves stood at 1,511.5 mt as of April 1, 2015, while copper metal reserves stood at 12.16 mt. Of the total copper ore reserves, 207.77 mt were under the reserves category and the balance 1,303.73 mt were under the remaining resources category. Of the total copper metal reserves, 2.73 mt were under the reserves category and 9.42 mt under the remaining resources category.
During 2017-18, copper ore production stood at 3.68 mt as compared to 3.84 mt during 2016-17, marking a decrease of about 4.2 per cent. During 2017-18, copper concentrate production stood at 141,000 tonnes. The overall production trend is fluctuating with a mix of peaks and troughs. The production of both copper ore and copper concentrate is primarily undertaken in three states – Madhya Pradesh, Rajasthan and Jharkhand. During 2017-18, Madhya Pradesh accounted for the highest production of copper ore at around 62.55 per cent, followed by Rajasthan at 29.1 per cent and Jharkhand at about 8.35 per cent. A state-wise analysis of production of copper concentrates also depicts a similar trend. Madhya Pradesh has the highest share (50.46 per cent), followed by Rajasthan (42.08 per cent) and Jharkhand (7.47 per cent).
Refined copper consumption in India stood at 0.66 mt for 2017-18, an increase of about 1.5 per cent from 0.65 mt consumed in 2016-17. The electrical and telecommunications industries are the largest consumer of copper accounting for 56 per cent of the total consumption. Meanwhile, the transport industry accounts for 8 per cent of the total copper consumption, and the consumer durables, building and construction sectors account for 7 per cent each, and general engineering industries account for 6 per cent.
The Indian copper industry is dominated by three key players – Hindustan Copper Limited in the public sector, and Hindalco and Sterlite Copper in the private sector.
Lead and zinc ores and concentrates: Total reserves of lead and zinc ore as of April 1, 2015, stand at 749.46 mt. Of these, 106.12 mt fall under the reserves category, while the balance 643.34 mt are classified as remaining resources. Meanwhile, the total lead metal reserves stand at 13 mt, while zinc metal stands at 36.36 mt, as of April 1, 2015.
From 2013-14 to 2017-18, lead and zinc ore production displayed an increasing trend. Lead and zinc ore production stood at 12.61 mt during 2017-18. During the year, production of lead concentrate stood at 306,000 tonnes, while that of zinc concentrate stood at 1,539,000 tonnes.
Hindustan Zinc Limited (HZL), a subsidiary of Vedanta Resources, which has fully integrated operations, enjoys a near-monopoly in the production of zinc and lead in the country as it meets nearly 80 per cent of the domestic demand. HZL is the second largest zinc-lead miner and the fourth largest producer of zinc-lead metal globally and has a smelting capacity of 1.04 million tonnes per annum (mtpa).
Non-metallic minerals
Limestone: Limestone reserves stood at 203,224.75 mt as of April 1, 2015. Of this, 16,336.37 mt was under the reserves category and the balance 186,888.38 mt was under the remaining resources category.
From 2013-14 to 2017-18, limestone production in the country has increased consistently. In 2017-18, production stood at 338.55 mt, about 8.2 per cent higher than that recorded in the previous year. Rajasthan is the major producing state, accounting for a production share of 22 per cent, followed by Madhya Pradesh (13 per cent). A major player in limestone production is UltraTech Cement. The company registered a growth of 19.45 per cent in cement production in 2017-18 vis-á-vis 2016-17. Other key players include Ambuja Cements Limited, Shree Cement Limited, Ramco Cements and Jaypee Group Limited.
Dolomite, quartz, kaolin, magnesite, silica and other sand: Among non-metallic minerals, dolomite has the largest reserves of 8,414.89 mt followed by quartz and silica sand (3,907.95 mt), kaolin (2,941.25 mt) and magnesite (393.99 mt).
From a high of 2,716 mines recorded in 2013-14, the number of reported mines dropped sharply to 866 in 2014-15. For 2017-18, the number of non-metallic mineral mines was estimated at 792 mines. The fall in the reported mines can be attributed to falling mineral prices, which may have induced producers to temporarily halt production or change quantity of production.
Magnesite production during the five-year period under consideration (2013-18) recorded dips and highs in production levels. Magnesite production experienced a decline of 34.5 per cent from 0.29 mt in 2016-17 to 0.19 mt in 2017-18. Dolomite production exhibited an increasing trend from 2011-12 to 2013-14. However, it then declined, dropping to 6.21 mt in 2014-15. A similar trend was evident in the production of quartz and kaolin during the same period (2011-12 to 2014-15). Production of silica and other sand, on the other hand, experienced a steady decline, from 7.8 mt in 2011-12 to 5.15 mt in 2014-15.
In sum
With infrastructure development gaining traction in the country and given the immense mining potential, the demand for minerals is expected to go up. This will require optimal utilisation of the given resource base, to contain imports. The recently approved National Mineral Policy, 2019, is likely to help the mining sector grow in a sustainable manner. Further, the emphasis on increasing exploration activities will enhance mineral output. Net, net, a booming economy and growth of end-user industries will keep the demand for minerals buoyant.