Dichotomy underlines India’s ambitious plans to double mineral production by 2020


Dichotomy underlines India’s ambitious plans to double mineral production by 2020

According to government data released last month, of these 288 projects, 94 had not made any headway as companies have not submitted  required documents, 110 projects are still awaiting environmental approvals from provincial and federal governments and 63 are yet to get the go-ahead from provincial governments.

A senior officials of the Mines Ministry has said that several rounds of consultations have been held between the Ministry and representatives of provincial governments and that the Ministry has issued a directive to each mineral-bearing province to establish an internal monitoring authority as a single point of clearance for all pending mining projects.

The number of pending projects has decreased from 318 in May to 288, but the effectiveness of the resolution process impacting projects is still to reach optimal level, the official has said.

One of the primary reasons for these projects getting into a logjam is that they fell in the cusp between old and new mining legislation. The 288 mining projects were all conceived and mining leases supposed to have been granted on discretionary basis. This was before the promulgation of the Mines, Minerals Development and Regulation Act 2015, which made auction mandatory for the granting of mining leases.

However, the new legislation provides that all projects which have received sanctions prior to January 2015 could be granted mining leases on discretionary basis, but that such leases have to be completed by January 2017.

A government official noted that time was running out for these projects to receive mining lease before deadline, unless the issues holding them were back were resolved over the next five months.

The logjam and approaching deadline to get them going underline the challenges, as well as dichotomy of laying down ambitious targets for the mining industry without attention to legacy issues, the official added.

The Mines Ministry has announced an action plan to double mineral production by volume by 2020 and thereby double its contribution to gross domestic product to 2%.

However, this will entail achieving a yearly growth rate of 20% to 22% for the mining industry. In 2015/16, India recorded a 9% growth in mining with noncoal mineral production at 395-million tons.

Besides legacy issues and pending projects, portents of future projects and mining sector growth are not too positive, considering tardy exploration and drilling record in the country.

As per information available from the Mines Ministry, the Geological Survey of India was able to achieve drilling of 102 815 m during 2015/16 against a target of 121 286 m.