Production of non-coal minerals: Little headway made after 2015 reforms

The mining sector reforms brought in for the overall sectoral improvement with the amendment to Mines and Minerals (Development and Regulation) Act in 2015 have yielded only mixed results when it comes to production of non-coal, non-fuel minerals such as limestone, iron ore, bauxite and chromite ore.

Data collected from the mines ministry’s annual reports reveal that while there had been a significant improvement in production, measured in compound annual growth rate (CAGR), of iron ore and chromite between FY16-FY22 compared with FY12-FY15, it fell for bauxite ore and remained static for limestone during the same comparable period.

Even considering that the mineral output got hampered with the onset of the pandemic in 2020-21 and lockdowns imposed to rein in the spread of the virus, the contribution of mining and quarrying sectors to gross domestic product (GDP) had been the lowest in six years in 2019-20 at 0.45%.

As per the provisional figures, in both 2020-21 and 2021-22, production of all these minerals have been lower than in 2019-20, the year before the pandemic struck. The data for 2021-22 are mines ministry’s estimates.

Apart from Covid-induced lockdown that might have hampered production in the last two years, the fall in the number of producing mines (excluding atomic, fuel and minor minerals) from 3,524 in 2014-15 to 1,332 in 2020-21 also have contributed to the fall in production. Indian mining industry is characterized by a large number of small operational mines.

The government has taken several policy reform measures to enhance production and increase the availability of minerals. These include early auction and operationalization of expired mines, ease of doing business, seamless transfer of all valid rights and approvals, incentivizing for starting mining operation and dispatch, transfer of mining leases, allowing captive mines to sell up to 50% of the minerals produced and enhancing exploration activities, among others.

Meanwhile, in a statement issued on Thursday, the mines ministry said that as per the provisional statistics of the Indian Bureau of Mines, the cumulative growth in mineral production grew by 13.2% during the April-February period of FY22 over the corresponding period of the previous year.

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