Owing to the nationwide lockdown imposed to stem the spread of the pandemic, the development of mining projects was severely impacted, leading to time overruns. There were delays in the completion of ongoing projects and the announcement of new projects, resulting in wide-scale disruption across the mining value chain.
In order to resume activity, the Ministry of Home Affairs, on March 24, 2020, granted exception to production units that require continue operation, and included coal and mineral production, transportation, supply of explosives and activities incidental to mining operations in the exceptions. Further, the Ministry of Steel requested the states to not impose any restrictions on the operation of steel plants, mines of iron ore, coking coal, thermal coal, limestone, dolomite, manganese, chromite, sponge iron, ferroalloys and iron ore pellet plants, etc. These provide raw materials for steelmaking.
As per India Infrastructure Research, there are over 280 key projects, which entail an investment of at least Rs 2 trillion and have a capacity of over 1,000 mtpa. About 63 per cent of this investment pertains to greenfield projects, while the remaining 37 per cent will be deployed for brownfield works. These projects span across minerals such as coal, lignite, iron ore, copper, lead and zinc, and limestone.
Upon completion, the projects are likely to augment the overall production capacity by over 1,088 mtpa. Over 600 mtpa of capacity will be added through greenfield projects, which is about 55 per cent of the overall capacity addition, while the remaining 485 mtpa will be realised through brownfield projects, accounting for about 45 per cent of the overall capacity addition. Further, the top 15 projects, with a capacity of 15 mtpa and above, are in the coal and iron ore segments. In terms of cost, the key projects include the Pachhwara North Coal Block Project, the Gare Palma Sector I Phase I Integrated Coal Mining Project and the Gevra Opencast Coal Mining Expansion Project, each entailing an investment of over Rs 100 billion.
Currently, state-owned Coal India Limited’s 54 mining projects are running behind schedule, mainly on account of delays in obtaining green clearances and issues related to rehabilitation and resettlement. The major reasons for the delay in the implementation of these projects pertain to forest clearances, possession of land, and rehabilitation and resettlement. In terms of location, the majority of the projects are located in Odisha and Jharkhand, which have at least 50 projects each, followed by Chhattisgarh, Maharashtra and Rajasthan. The maximum capacity additions, too, are lined up in these states.
Going forward, with the increase in demand and the ramp-up in production activities, most of the ongoing and upcoming mining projects are likely to get back on track and be completed within the stipulated time frame.