India has vast mineral reserves and the mining industry plays a vital role in supporting the country’s economy. It also serves as one of the major sectors for employment generation and is crucial for making India “atmanirbhar”. The government has been focusing on reforms in the mining industry. These reforms are anticipated to revive the industry and enhance its contribution to the overall economic growth.
Policy initiatives
The mining sector in India was marked by a number of policy initiatives in 2022, which paved the way for amendments to acts and regulations to accelerate mining activity and ease of doing business. The revisions to these acts and rules led to a significant reduction in the bottlenecks being faced by the mining sector.
Under the Mineral (Auction) Amendment Rules, 2022, GPS technology will be used for identification and demarcation of the area where a composite licence is proposed to be awarded. The same was notified on February 18, 2022. Further, the requirement of classification of the area to be auctioned into forest land, government land, and land not owned by the state government has been removed.
Further, on June 3, 2022, the Reimbursement of Exploration Expenditure Rules, 2022 were notified for the purpose of covering concession holders’ exploration expenditure after their rights expired under the Mines and Mineral (Development and Regulation) (MMDR) Act, 1957. Moreover, 13 accredited private mineral exploration agencies were notified by the Ministry of Mines under the MMDR Act for the purpose of carrying out prospecting operations without a prospecting licence.
Another highlight of the steps taken by the ministry during 2022 was KhanijBidesh India Limited’s (KABIL) initiative to source strategic minerals from countries such as Australia, Argentina and Chile. KABIL is a joint venture of National Aluminium Company Limited (NALCO), Hindustan Copper Limited (HCL) and Mineral Exploration and Consultancy Limited (MECL). It was formed to identify, acquire, develop, process and make commercial use of strategic minerals in overseas locations for supply in India. KABIL focuses on identifying and sourcing battery minerals such as lithium and cobalt.
Sustainable mining
The mining sector can pose challenges in terms of impact on livelihood and human rights. However, it has a huge potential to contribute to the achievement of the sustainable development goals (SDGs) through the development of infrastructure and supply of raw materials for green technologies.
Following the recommendations of the committee headed by AnwarulHoda in 2005, the MMDR amendment act in 2015, for the first time legally mandated sustainable development in the mining sector in India. Following this, district mineral foundations (DMFs) were created to promote the sustainable development of mining-affected areas. The creation of DMFs has been one of the most important steps towards institutionalising benefit sharing in the Indian mining sector. In order to maintain mineral output and increase mineral extraction, the act was further updated in 2020 and 2021.
DMFs have been established in 622 districts across 23 states in India, and, till October 2022, a total of Rs 711.29 billion has been collected. To implement projects under the Pradhan Mantri KhanijKshetra Kalyan Yojana (PMKKKY), by utilising the funds under DMFs, Rs 641.86 billion was allocated and Rs 379.23 billion was utilised. So far, 253,747 projects have been sanctioned under the scheme. Of these, 135,912 projects have been completed.
Besides, the ministry has developed the Sustainable Development Framework (SDF) for the sector with the aim to lead mining sector growth in a sustainable manner.
By 2030, India aims to more than triple the amount of its renewable energy capacity. However, while coal production is being increased to meet the rising energy demand, state support for renewable energy projects is still a fraction of that for fossil fuel-based projects. The financial decisions of Indian banks and institutional investors are forcing the country to rely on a more expensive, more polluting source of electricity. As per industry estimates, 17.5 per cent of bank lending to the electricity sector has been given to renewable energy. In spite of its enormous potential for inexpensive solar, wind and hydropower, India generates far more electricity from carbon-based sources than the global average.
One of the greatest challenges for India in the years ahead will be to revive the degraded and damaged ecosystems. The task of ecological restoration is gaining attention in the country. Recently, Coal India Limited (CIL) announced its plan to convert more abandoned mines into ecoparks, which have become popular ecotourism destinations. Around 30 such ecoparks are attracting steady footfalls and plans are underway for the creation of more ecoparks and eco-restoration sites in CIL’s mining areas.
Technology moves
The use of digital technologies and automation in mining operations is being prioritised in order to increase output, promote sustainable resource usage, reduce fixed costs, and enhance worker safety. Artificial intelligence (AI), machine learning, and industrial internet of things (IoT) have several uses in this industry.
In January 2023, the technology-driven mining services company Squadrone from Karnataka operated autonomous drones in underground mines in Udaipur, Rajasthan. It is the first Indian company to undertake such initiative. It has successfully finished a proof of concept in the underground mine of Hindustan Zinc Limited in Udaipur. The use of drone-based Hovermap LiDAR technology is anticipated to significantly alter how underground mines are operated in India and would significantly improve every miner’s life through increased safety, productivity and efficiency.
According to industry experts, in order to reduce risk and enhance production, mining operations are predicted to extensively rely on cutting-edge technologies. These technologies would include sophisticated wireless communication systems, real-time positioning system sensors and tags, and automation systems.
The Geological Survey of India recently conducted preliminary exploration of lithium reserves in India and established lithium inferred reserves. In order to mine these reserves, the country needs to make use of cutting-edge technologies and international tie-ups. This would help India achieve its target of net zero emissions by 2070.
Tapping underground mining
In order to increase the contribution of non-petroleum and iron ore sectors to GDP, the Government of India is striving for additional explorations of subsurface mineral reserves. As per recent reports, a total of 430 blocks at the G3, G4 and G5 levels have been explored across the country and the exploration reports have been handed over to the states. CIL is also concentrating on underground mining. This is being carried out by way of eco-friendly technologies to reduce the negative environmental impact of mining. The thrust on underground mining is expected to reduce the problems of land acquisition.
Future outlook
There is a huge opportunity and potential for growth in the mining sector in India. The major focus should be on improving production in a sustainable manner. The Government of India has set a target of increasing the mining sector’s contribution to GDP to 2.5 per cent by 2026-27. It plans to come up with investor- and industry-friendly norms for the sector. The government and the private sector need to work together to achieve the set target.
Global best practices, especially in terms of the use of technologies such as AI in exploration and mining, need to be studied and deployed in the mining sector in India. The country needs to be fully conscious of the environmental impact of fossil fuels. Even though coal mining is regarded as detrimental to the environment, it is essential for fostering growth and development. While the production of coal is not expected to reduce in the near future, the long-term production is expected to reduce, which will bring down coal mining as well.