Mining Sector

India is well endowed in minerals and produces as many as 95 minerals, which include 4 fuel, 10 metallic, 23 non-metallic, 3 atomic and 55 minor minerals (including building and other materials) mined through 1,300 mines.

India continued to be largely self-sufficient in minerals which constitute primary mineral raw materials that are supplied to industries, such as iron & steel, aluminium, cement, various types of refractories, china clay-based ceramics, glass, etc.

Challenges

  • Despite, India being well-endowed in minerals, the sector still lags behind other nations in mineral exploration and mining.
  • Before 2015, grant of mineral resources was through ‘first-come-first-serve’ method which was discretionary and decision making was not transparent.
  • Process of renewal of mining leases was acting as an obstacle in attracting large scale investment in the mining sector.
  • Allocation of mineral concession was not generating any revenue to the Government other than royalty.
  • Slowdown in grant of new concessions and the renewal of existing ones.
  • Mining sector started registering a decline in production, affecting the downstream manufacturing sector which depends on the raw material provided by the mining sector.

Government Initiatives

Starting 2015, the government carried out a series of major reforms in the mining sector:

The Mines and Minerals (Development and Regulation) Act, 1957 was comprehensively amended in 2015 to bring several reforms in the mineral sector, notably:

  • Mandating auction of mineral concessions to improve transparency.
  • Establishing District Mineral Foundation and National Mineral Exploration Trust.
  • Stringent penalty for illegal mining.
  • To remedy the basic structural defects of the mining sector and infuse greater ease of doing business, the Mines and Minerals (Development and Regulation) (MMDR) Amendment Ordinance, 2015 was promulgated on 12th January 2015, which was replaced by the MMDR Amendment Act, 2015.
  • The Act was further amended in the years 2016 and 2020 to allow transfer of leases for non-auctioned captive mines and to deal with the emergent issue of expiry of leases on 31stMarch 2020, respectively.

Further, to propel India into a 5-trillion-dollar economy and to double the employment potential in next five years, the Mines and Minerals (Development and Regulation) Amendment Act, 2021 has been enacted.

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