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8/3/2019 India Mining Strategic Plan 2011
1/20
1
STRATEGIC PLAN
FOR
MINISTRY OF MINES
8/3/2019 India Mining Strategic Plan 2011
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3. FUNCTIONS
Ministry of Mines is responsible for survey and exploration of all minerals,
other than natural gases, petroleum and atomic minerals; for mining and
metallurgy of non-ferrous metals like aluminium, copper, zinc, lead, gold,
nickel etc. and for administration of the Mines and Minerals (Development
and Regulation) Act, 1957 in respect of all mines and minerals other than
coal, natural gas and petroleum. A list of subjects allocated to the Ministry
of Mines, attached / subordinate offices, Public Sector Undertakings and
Research Institutions under the administrative control of Ministry of Mines
is given below :-
(a) Legislation for regulation of mines and development of minerals within
the territory of India, including mines and minerals underlying the ocean
within the territorial waters or the continental shelf, or the exclusive
economic zone and other maritime zones of India as may be specified,
from time to time by or under any law made by Parliament.
(b) Regulation of mines and development of minerals other than Coal,
Lignite and Sand for stowing and any other mineral declared as
prescribed substances for the purpose of the Atomic Energy Act, 1962
(33 of 1962) under the control of the Union as declared by law,
including questions concerning regulation and development of minerals
in various States and the matters connected therewith or incidental
thereto.
(c) All other metals and minerals not specifically allotted to any other
Ministry/Department, such as Aluminium, Zinc, Copper, Gold,
Diamonds, Lead and Nickel.
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(d) Planning, development and control of, and assistance to, all industries
dealt with by the Ministry.
(e) Geological Survey of India
(f) Indian Bureau of Mines
(g) Metallurgical Grade Silicon.
4. ASSESSMENT OF SITUATION
4.1 As per the Seventh Schedule to the Constitution in terms of the
provisions of Article 246, mining and mineral development is allocated tothe Central and the State Government.
4.2 As per the Constitutional provisions, the State Governments, as the
owners of the minerals, grant mineral concessions for exploration and
mining of minerals. However, in the exercise of the powers vested by the
Constitution of India, Parliament after declaring it to be in expedient in the
public interest has enacted the Mines and Minerals (Development and
Regulation) Act, 1957 (MMDR Act). The MMDR Act enables all the
States to exercise their powers within a uniform national framework. It can
be then stated that the powers of the State Governments stand denuded to
that extent so far as the Parliament has legislated on a subject. This is not a
case of concurrent subject in the Seventh Schedule to the Constitution of
India, but a case of a subject matter in the List II of the Seventh schedule of
the Constitution being curtailed to the extent by the exercise of powers under
List I of Seventh schedule of the Constitution in public interest.
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4.3. Since State Governments are owners of minerals in their respective
jurisdiction, the royalty and other revenues are collected by the State
Governments and credited to the Consolidated Fund of the State.
4.4 In order to regulate mining activities in the offshore areas, there is a
separate enactment, Offshore Areas Minerals (Development and
Regulation) Act, 2002 for this purpose, and the mineral concessions for
offshore areas will be given directly by the Central Government in such
cases and royalty will be credited to the Consolidated Fund of India. The
administering authority for offshore areas, including concession
management, is done by the Indian Bureau of Mines, a subordinate office of
the Ministry of Mines.
4.5. Reconnaissance permit and prospecting licence are licences issued by
the State Government for onshore areas, and by the Central Government for
the offshore areas. Mining leases on the other hand are lease agreements
entered into by the lessee (concessionaire) with the State Governments in the
case of onshore minerals in terms of the section 5(1) of the MMDR Act. The
lease agreement in the case of onshore areas describes the property with
reference to the revenue records as maintained by the respective State
Governments. In case of offshore areas, mining leases will be executed with
the Central Government (through the Indian Bureau of Mines etc).
4.6 EXTERNAL FACTORS IMPACTING THE MINING SECTOR:
Opportunities
Mining and metals sectors can play a critical role in the economic
development, attracting investment and employment generation in the
country. The demand for various metals and minerals will grow 4-5
times over the next 15 years (9-11% growth per annum) against a
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backdrop of globally dwindling and increasingly scarce resources.
There will be huge demand for the metals in view of the rapid
urbanisation and growth in the manufacturing sector in India as
shown below in Figure 1. The mineral sector needs to prepare for
facing the challenges in view of increasing demand and reducing
resources world over.
Figure 1. Metals demand in India will increase 4 to 5 times over 15 years
2010
Steel demandMillion tons
Aluminum demandMillion tons
275
60
2025
8.5
1.6
20252010
Copper demandMillion tons
2010
2.4
0.6
2025
With the mineral potential in India, the contribution of the mining
sector in the GDP should aspire to increase from 2.3% currently to
around 7-8% over 20 years. The mining sector needs to play a major
role if India has to realize the potential growth of 9%per annum in
the coming years. The importance of the sector in the growth of GDPin mineral rich countries indicates the opportunities available for
India (Figure 2).
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Figure 2. Mining industry in India accounts for 2% of the GDP while inAustralia and South Africa the share of mining industry in more than 8%
SOURCE: Global Insights
98 9692 91
98
100% =
Others
Mining
Brazil
1,270,425
2
South
Africa
240,913
9
Australia
899,495
8
China
4,772,760
4
India
1,088,168
2
Million dollars, 2009
Share in Mining Sector in GDP
Development of the minerals potential could also help in
mainstreaming the local communities (including tribal communities )
by sharing the economic benefits of mining related activities with
them in a fair and equitable manner through mechanism that give
them choices and enable them to adopt changes at a pace of their
choosing . Most of the mineral potential areas are in the interior
tribal areas of India , where the development is the lowest .The
mineral sector can potentially change the situation by providing
much needed employment and infrastructure creation needs. The per
capita GDP in these mineral rich, tribal dominated states vs. the
India average and a similar comparison in other countries indicates
the strategic need to unlock the potential of the mineral sector
(Figure 3).
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Figure 3. Unlike India, states with major mining and resource activity inAustralia and the US have higher GDP/capita compared to the respectivenational average
SOURCE: Mospi, Australian Bureau of Statistics, Bureau of Economic Analysis, US
GDP/capita, 2009
577
972
1,075
802
56,861
81,778
42,031
42,546
India
Chattisgarh
Orissa
Jharkhand
Australia
WesternAustralia
USA
Texas
USD
Technologically superior solutions and development are available to
be leveraged for exploration and utilization of low grade minerals.
Threats
Insufficient exploration. The reserves for iron ore and bauxite in
Australia grew 150 to 200% between 1985 and 2005. In contrast, in
India they increased by 10-20% only. Figure 4 represents the
phenomenal growth recorded in Western Australia
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Figure 4. Western Australia increased its minerals revenue 4000 times over44 years
SOURCE: Government of Western Australia
13
2008
51,300
1964
Mineral outputAUS$ million
21% CAGRover 44 years
At present the flow into the exploration efforts is meager in India ,
which needs urgent attention. Figure 5 details the position as
compared the world scenario.
Figure 5. Low investment in further exploration in India to develop
new resources
SOURCE: Metal economics group, 2008
5.0
6.0
6.0
7.0
12.019.0
31.0
India
0.5Othercountries
CanadaAustralia
United States
Russia
Mexico
Peru 4.0Chile
4.0
South Africa3.0
China
3.0
Brazil
Percent
Indias share in worldwide exploration ofnon ferrous minerals
India has a land Mass of~ 1.82 million sq. kms
3% (~ 56,000 ) hasbeen mapped geophysically
4% (~ 73,000 ) has
been mapped geochemically
Large land mass is yet tobe fully explored
ILLUSTRATED FOR NON FERROUS
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Historically, multiple issues have constrained the capture of the full
potential of the minerals wealth in the country. These include :-
Insufficient exploration,
Unattractive investment environment,
Lack of a clear system for disposal of government prospected
mineral ore bodies,
Poor performance of State Directorates of Mining and Geology
Perception of mining in terms of ecological & environment
practices,
Delays and uncertainty in the approval process,
Inadequate supporting infrastructure and insufficient legislative
framework (Act and Rules) and poor enforcement.
Social issues are becoming more prominent and are likely to
impose constraints on mining, if not addressed within a holistic
framework. These areas out of a feeling that benefits from mining
related activities are not flowing for local area development and
in fact revenue generated from mining is channelized for
development of other parts in the State.
Multiplicity of agencies in decision making leading to delays in
investment. The prospective investors need to interact and obtain
clearances from 10 different agencies (adding up to 90 desks)
compared to only 4 agencies and single window facilitation in
Western Australia. Consequently, the mining clearance in India takes
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4 to 7 years in an average compared to 18 months in Western
Australia.
5.1 OUR STAKEHOLDERS
Our key stakeholders include:
State governments
Concerned ministries (Ministry of Environment & Forests, Ministry of
Steel, Ministry of Tribal Affairs, Ministry of Coal, Ministry of
Commerce and Industries, Department of Atomic Energy, Ministry of
Chemical and Fertilizers, Planning Commission, Ministry of Railways,
Ministry of Shipping, Ministry of Roads & Surface Transport)
Industry players
Communities affected by mining operations
Civil Society Organisations (CSOs)
5.2. STRENGTHS OF THE MINISTRY
The country is blessed with large, high quality reserves of a large
number of minerals with potential resources of a large order locating to
be prospected.
Ministry is open to new ideas and well placed to provide sectoral policy
direction
Substantial debate has happened over the last 5 years amongst the
various stakeholders on the priorities for the mining sector providing a
robust platform to define reforms and the formulation of the National
Mineral Policy 2008
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Supporting institutions such as IBM and GSI with large S & T human
resources and knowledge.
5.3 WEAKNESSES OF THE MINISTRY
Many areas of NMP-2008 have not been operationalized leading to
suboptimal realization of potential.
Weak techno-economic expertise with the ministry and its agencies.
Key agencies such as, GSI and IBM are inadequately equipped and lack
skilled manpower at crucial levels, weakening the impact of the
Ministry.
Inadequate staffing in the Ministry, with insufficient in-house expertise
on technical, scientific regulatory and economic issues, particularly
multidisciplinary approaches and inability to access outsourced
expertise.
Lack of effective interaction forums with the stakeholders, including the
States, Industry and CSOs.
Ministry not keeping pace with the rapidly changing needs and
processes of mining industry and in creating suitable frame work for
the Indian mineral sector
5.4 LEARNING PRIORITIES
We can learn from the experience of countries such as Chile, Brazil andAustralia who successfully addressed similar issues in the past 2-3
decades as currently faced by the Indian mining sector e.g., expanding
the reserve base, expediting the clearance process.
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We can learn from other ministries and state governments to create
forums and mechanisms for seeking inputs and de-bottlenecking cross-
cutting initiatives.
6. OUTLINE OF THE STRATEGY
6.1 Potential strategies
We should build upon our strengths and address the historical weaknesses.
Broadly speaking this will involve building upon the various deliberations
and thinking done over the last few years (e.g., GSI reforms, IBM reforms,
MMDR Act, etc.), resolve the major issues in the plan/ legislation and then
getting them implemented systematically over the next few years through
well designed rules and guidelines. The role of a well equipped
implementational mechanism is crucial to the process.
6.2 Priorities
The following eight priorities in line with the objectives articulated in the
section 1B and the actionable points in the National Mineral Policy 2008.
Ensure early passage of the new Mines and Minerals (Development and
Regulation) Bill 2011, replacing the existing Mines and Minerals
(Development and Regulation) Act, 1957, after suitably addressing the
concerns of the relevant stakeholders [weightage: 20].
Substantially step up the exploration efforts on the high priority
minerals by redefining the role and capabilities of GSI, leveraging theexisting data with GSI, enhancing the private sector participation,
ensuring strict compliance and addressing the constraints of the current
concession process ( through legislation) [weightage: 20].
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Substantially enhance the effectiveness of GSI, IBM and PSUs by
redefining the mandate for them undertaking capability building and
setting in place an effective monitoring mechanism [weightage: 15].
Establish a forum and mechanism to interact with the key stakeholders
(including the industry players, states, concerned ministries, VC
investors), channelize their genuine requirements into the agenda of the
Ministry of Mines and facilitate timely implementation of initiatives
particularly infrastructure creation (e.g., rail infrastructure creation)
[weightage: 15].
Define guidelines and encourage compliance to scientific, sustainable
mining practices within a Sustainable Development Framework.
[weightage: 10].
Establish a system to bring in performance transparency across keyexternal processes (e.g., mineral concession process) and progress of
key internal initiatives (e.g., GSI and IBM reforms) [weightage: 10].
Help the Indian mining players acquire mineral resources globally
through G 2 G interventions facilitate B 2 G relationships though
support to exploration and human resource development through GSI
and MECL [weightage: 5].
Develop capability to access techno-economic policy options and inputs
for important issues such as value addition, beneficiation, venture
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capital, high technology exploration, strategic minerals, recycling
processes and technologies, mine closure etc.[weightage: 5].
6.3 Engaging stakeholders
This strategy would be largely driven by the Central Government and is
likely to help the various stakeholders not only in assessing the potential
growth avenues available to them and capitalizing on them, but also in
recognizing their role in the development of mineral sector. In order to do
so, the Central Government would be providing suitable formal and informal
platforms for stakeholder engagements at both the National and State level.
The initiative is likely to be welcomed globally by investors, since it would
set out the priorities of the Government for the sector, and allow the
investors to plan their operations. The State Governments are likely to be
engaged actively in a much more focused manner, which is important
considering the fact that they are the owners of on-shore minerals.
6.4 Building knowledge and capabilities
The Ministry of Mines has developed capacities for training, and Research
& Development in GSI and IBM. While upgradation of these facilities is
required, yet these facilities can form the base for imparting knowledge and
capabilities. Further, the capabilities can be enhanced further through regular
exchanges with the industry bodies elsewhere.
In addition, the ministry will study the good practices followed by other
countries.
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7. IMPLEMENTATION PLAN
The strategic plan sets out target for the Ministry with definite timelines.
Sl.
No.
Strategic Initiative Sub-Item MeasurableIndicator
1. Rework legislative
framework to bring
in transparency,
investor
confidence,
sustainability
concepts and
better regulation.
(i) Draft new legislation to
replace MMDR Act,
1957 and its Rules.
(ii)Create Independent
Regulators under new
Act.
(iii) Develop Sustainable
Development
Framework at Policy,
Regulatory and
Operational levels.
(iv) Position IBM as
technical regulator.
(v) Strengthen DGMs as
field regulators.
(i) New Act (by 2012)
New Rules (by
2013).
(ii) Appointment of
Regulators.
(iii) Roll out of
framework at
mine level.
(iv) Implement Report
on IBM (by 2012).
(v) Get State toprepare and
implement Action
Plan (by 2012).
2. Enhance
exploration activity
particularly for
base and strategic
minerals and rareearths.
(i) National Geochemical,
Geomorphological Map
and Aeromagnetic maps
on 1:50,000 scale.
(ii) Execute GSIs Phase-III
Portal Project to put out
precompetitive data.
(iii) Create mechanisms to
access venture capital.
(i) All existing
1:50,000 maps in
GIS environment
by 2013.
(ii) By 2015.
(iii) Document
prepared in
collaboration with
DEA (Cap
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(iv) Publish Detailed
Information Dossiers
(DID) on base metals,
PGE, REE diamonds,
etc.
Markets) and
TSX.
(iv) Publish DIDs by
2012
3. Develop policy
prescriptions and
enabling
environment to
develop the
mineral sector forbase, noble and
strategic metals
and diamonds to
the fullest.
(i) Create and utilize
institution to provide
attributable and non-
building techno-
economic policy advice
to Government andIndustry.
(ii) Development of metal-
specific policies
comprising extraction,
beneficiation, value
addition, conservation,
acquisition, raw material
security, recycling,
substitutes and
alternatives.
(iii) Creation of R&D
institutions under an
overarching framework
for coordinated work.
(iv) Activation of National
Mineral Advisory
Council as highest
policy making body of
the mineral sector.
(v) Develop and execute
strategies for achieving
raw material security for
important metals and
minerals and facilitate
metal and mineral
(i) Positioning of the
institutions by
2012.
(ii) By 2014.
(iii) By 2014.
(iv) By 2011.
(v) MoUs with mineral
rich countries and
preparation of
Country Dossiers
identifying
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industry in accessing
raw material assets
abroad.
opportunities.
4. Develop a distinct
Geoscientific rolefor the Ministry and
for GSI focusing
on fundamental,
multidisciplinary
and societal
scientific issues.
(i) Position GSI as centre
for specialized andmultidisciplinary
geosciences and HR
development for
deployment across
sector.
(ii) Develop geoscientific
partnerships with State
Governments, Central
institutions, including
offshore research andglobal change issues.
(iii) Create multi-Ministry
National Geoscience
Council to lay down
geosciences policy
directions andcoordinate.
(i) Implementation of
HPC Report.
(ii) Conversion of
Central
Geological
Programming
Board (CGPB)into National
Geoscientific
Programming
Board (NGPB).
(iii) Creation of
Council.
5. Reposition the
Ministry from a
regulatory role to
a techno-
economic,
scientific and
facilitatory role.
(i) Generate techno-
economic policy papers
and provide fora for
discussions.
(ii) Forge relationships with
Industry associations for
metals, mining
technologies, equipment
technologies,
exploration
technologies.
(iii) Facilitate Industry in
(i) Identify develop
and fund
institutions.
Ongoing, starting
2011.
(ii) Create Business
Development
Plans for each
area.
(iii) Get into MoUs,
prepare Country
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8. LINKAGE BETWEEN THE STRATEGIC PLAN AND RFD
The RFD for the ministry can be derived from the implementation plan and
timelines described above.
9. CROSS DEPARTMENTAL AND CROSS FUNCTIONAL ISSUES
The success of the effort will depend upon a co-ordinated effort across the
agencies of the ministry of mines, states and other stakeholders. Definition
of forums for these interactions is one of the eight strategic priorities
identified by the ministry. After defining these forums then focus will be on
accessing technology
assets abroad.
(iv) Hold and facilitate
holding of and
participation in
workshops, Seminars,
Explorations, Trade
Shows, etc. to facilitate
policy making and
Industry.
specific Dossiers
on opportunities,
participate in
events, create
G2G environment
and facilitate B2Gopportunities for
Indian business.
(iv) Coordinate the
participation of
Ministries
concerned and
Industry in global
events includingPDAC, Indaba,
Mining Congess
in China,
Australia and
Singapore.
Organise annual
shows in India
through CII and
FIMI.
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to start implementing priorities with in next five years. The process will
be made pragmatic by leveraging the existing forums of other ministries.
10. MONITORING AND REVIEWING ARRANGEMENTS
While we will detail the mechanism for monitoring the external processes
and internal initiatives, we expect these to follow three principles:
Create transparency by tracking progress through a well defined MIS
and making it visible to all stakeholders. Various stakeholders should
also be able to update this
Review the progress and de-bottleneck at the agreed interaction forum,
including a review by the Honorable minister