The mining industry is one of the major industries in India as a lot of minerals important to production of different products are extracted from mines across the world. Some precious metals are also mined for different purposes.
Precious metals like diamond, gold, etc. are mined to make different kinds of jewellery and metal like steel and iron are extracted from land for industrial production. The mining activities have a huge and negative impact on the environment as it leads to dangers like over-mining and exploitation of land. If a particular piece of land is over-mined, then it risks the danger of running out of metals and other important minerals.
Mining has been in practice since ages today. Earlier, people mined only as per their needs. However, today with over-mining, the nature is at a risk of running out of important non-renewable resources. And finding alternatives to these resources is almost impossible.
Some Important Updates on the Mining Sector:
India being the third largest producer of coal had a production of 729.10 million tonnes (MT) in FY20 and till April 2020 it had already reached 55.42 MT. Also, India is the fourth largest producer of iron ore. However, according to the Ministry of Steel, in the month of February 2020, the production faced a decline of 28%.
Due to the Coronavirus pandemic first starting in China, the export of iron ore declined. Moreover the international iron-ore prices decreased by 6% in Feb 2020 in comparison to the previous month due to the pandemic.
Between April 2000 and March 2020 the FDIs to the metallurgical industries was $13,401.78 million. At the same time, FDIs in gold and diamond mining and coal production was $2,731.07 million. Also, production of aluminium was 3.65 MT in FY20. And aluminium exports touched $18.24 million in FY20. India’s iron and steel exports reached $7.6 billion as of Jan 2020.
According to Indian Brand Equity Foundation (IBEF), the Indian Government introduced the Mineral Laws (Amendment) Bill, 2020 to promote ease of doing business. The bill was introduced on March 2, 2020. This bill will help remove restrictions in coal mining and selling business and can even use the coal for their own consumption.
Moreover, under this bill, the Government has combined the two licenses required for mining, i.e. Prospecting and Mining Licenses. There will be only one license which shall be used for prospecting and mining activities.
The Central Government also introduced a string of infrastructure projects of social and economic nature under the National Infrastructure Pipeline in 2019 so that the Government can invest Rs. 100 lakh crores ($1.43 trillion) over the next five years.
Also, the National Mineral Policy was announced in 2019 to create transparency, ensure better regulation and enforcement and to also ensure overall socio-economic growth of the sector.
FDIs up to 100% are allowed under the Mines and Minerals (Development and Regulation) Act, 1957 for mining precious metals like gold, silver, and diamond. Also, 100% FDI under the Government route has been approved under the same act for mining and mineral separation of titanium bearing minerals and their ores.
While there are certain positive business and investment opportunities ahead, the mining industry is suffering from the aftermath of the pandemic. This is due to heavy decline in the production and export of various minerals as there is a lack of international demand for these products in the pandemic. Businesses are running slow and the manufacturing plants are facing shortage of raw materials and the entire global supply chain has been disrupted.