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The Working Group on Mineral Exploration and Development (Other Than Coal & Lignite)

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The Working Group on Mineral Exploration and Development (Other Than Coal & Lignite) REPORT OF THE WORKING GROUP ON MINERAL EXPLORATION AND DEVELOPMENT (other than Coal and Lignite) FOR THE ELEVENTH FIVE YEAR PLAN OVER VIEW VOL - I GOVERNMENT OF INDIA PLANNING COMMISSION January, 2007 1.0 REVIEW OF THE ACTIVITIES OF THE Xth PLAN 1.1 Geological studies carried out in past half-century have delineated vast area suitable for hosting mineral deposits. However, most of the exploration activity in the country even in the post-independence era remained confined to the stretches traditionally known to be locales of mining activities. Industrialization has led to manifold growth of mineral sector and fast depletion of known and near surface deposits would be the unavoidable result. During the Xth Plan, the need to adopt modern exploration techniques and beneficiation technologies was felt, mainly to locate the concealed mineral deposits and utilize the low-grade ores, which were hitherto being discarded as waste. 1.2 The Indian landmass measures 3.28 million sq.km., of which 2.42 million sq.km is constituted of hard rock. Out of the total hard rock area, approximately 7,00,000 sq km (5,71,000 sq.km. for Schedule Minerals) has been identified to contain geological associations and surface shows indicative of possible mineral occurrences. 1.3 During the Xth Plan (2002-2007) major thrust has been accorded to exploration for high value minerals like gold, diamond and platinum group of elements (PGE). Efforts for augmenting resource base for those mineral commodities having key role in sustaining industrial growth were also continued. Application of state-of-the-art technology for exploration and integrated multi-disciplinary approach were introduced during this period. 1.4 During the Xth Plan period Geological Survey of India (GSI) added 12,177 million tonnes of coal, 941 million tonnes of lignite, 8.2 million tonnes of copper ore, 0.8 million tonnes of lead-zinc ore, 37.42 million tonnes of iron ore, 14.38 million tonnes of manganese ores, 5.70 million tonnes of bauxite, 1883 million tonnes of limestone, 42.49 million tonnes of gold ore and 5.56 billion cubic meters of coal bed methane (CBM), to the National Inventory mostly by way of new discoveries. On the basis of conceptual approach and application of multi-disciplinary data synthesis, several kimberlite/lamproite pipes have been discovered by GSI during the same period. Four of these pipes from Andhra Pradesh have been found to be diamond bearing. In Maharashtra, diamond was recovered from Wairagarh conglomerate. Similarly, Mineral Exploration Corporation Limited (MECL) has identified and added 10,651 million tonnes of coal and 4667 million tonnes of lignite to the total energy mineral resources of the country during the Xth Plan period. MECL has also augmented 137 million tonnes of base metal and 3.35 million tonnes of gold ore. In the same period National Mineral Develoment Corporation (NMDC) has identified few blocks for Prospecting License (PL) out of their Reconnaissance Permit (RP) area. Contribution on the part of the State Governments has been mostly towards establishment of additional resources of limestone and dolomite. 1.5 Planned efforts for locating minerals over the last 55 years have enhanced reserves for various minerals like mica, barytes, chromite (metallurgical), coal (thermal), lignite, bauxite (metallurgical), manganese, iron ore, and resulted in the country being placed among the top ten producers for these minerals. However, India continue to 1 display significant shortfall in many crucial minerals like fertilizer minerals, diamond, nickel, copper, gold, platinum group and rare metals leaving the country import dependent in these commodities. 1.6 Amendments to the Mines and Minerals Development & Regulation (MMDR) Act and the Mineral Concession Rules (MCR) have been introduced to create congenial environment for attracting investment in the mineral sector. As a sequel to this, several Multinational Companies (MNC’s) have taken up exploration activity in the country and at present an area of 3, 64,000 sq.km is under different kinds of lease to private agencies, including MNCs. The exploration efforts in these leaseholds are yet to bear fruit. However, the record of applications for conversion from RP to PL suggests that the success ratio of the State agencies is at par with these Companies. A total number of 202 RPs and 73 foreign direct investment [FDI] proposals from global majors expected to invest about one billion US $, have been approved till 31-12-2005. 1.7 It has become apparent that the Private agencies have chosen to concentrate their exploration activities in areas with surface shows as recorded in the reports of Geological Survey of India and also in areas adjacent to those where mining activities developed through the efforts of the State agencies are going on. 1.8 During the Xth Plan, GSI has implemented an information infrastructure (GSI Net & Portal) based on an open, state of the art technology platform. The said information infrastructure will comprise a GSI Intranet including local area network (LAN) at different Regional / Wing / Operational Offices and wide area network (WAN) connecting all these offices and an Enterprise Integrated Portal (EIP) that will be a centralized, web-base providing single point access to all the applications in the GSI Enterprise Application suite. During the period under review, LAN at all other regions except NER, at operations and Wings were completed; the proposal for WAN, IP telephony and video-conferencing is under scrutiny. Work on Central Data Center at Kolkata and Disaster Recovery Center at Hyderabad is in progress. Portal is on design- development stage and expected to go live shortly. 1.9 Modernization efforts proceeded during the Xth Plan and attempts had been made to make up the shortfalls in achievement during the IXth Plan period. Orders have been placed for helicopter and heliborne survey equipments that are likely to be supplied during the early part of the XIth Plan Similarly the administrative procedures for obtaining clearance for the replacement ocean going vessel have been completed and further procedure for procurement will be completed during the XIth Plan. 1.10 COPPER 1.10.1 There has not been any significant change in inventory of copper reserves over past five years in India as no major copper deposit was located during this period. 1.10.2 Hindustan Copper limited is sole producer of copper from mines. Production of copper metal in concentrate [MIC] from mines in last five years was meager and has remained less than 30,000 tonnes per year. 2 1.10.3 The capacity for production of primary copper in India has risen from a mere 47,500 tonnes per year till 1997 to approximately 8,97,000 tonnes in FY 2006-07. 1.11 ZINC & LEAD AND ASSOCIATED METALS 1.11.1 After aluminium and copper, zinc and lead are among the most widely used nonferrous metals in the world. 1.11.2 The Indian zinc-lead industry comprises two primary producers - Hindustan Zinc Limited (HZL) and Binani Industries Limited (BIL), both in private sector. HZL was earlier a Government of India enterprise and post disinvestment in April 2002, it has become a private sector and presently a group company of Vedanta Resources. HZL is a vertically integrated producer from mining to smelting with its major operations in Rajasthan, while BIL has a smelter located in the west coast. 1.11.3 The zinc and lead price movement at London Metal Exchange [LME] during the last 10 years [1996 to 2005] has been varying substantially. After declining to record low levels in 2002, the prices started showing improving trend in subsequent years. 1.11.4 The total primary zinc metal production capacity in India at the end of terminal year of the IXth Plan (2001-02) was 199,000 tonnes per annum (tpa). (HZL – 169,000 tpa, BIL – 30,000 tpa). There has been progressive capacity build up by HZL during the early years of the Xth Plan through de-bottlenecking and modernization in its operating zinc smelters. This was followed by commissioning of a new 170,000 tpa hydromet zinc smelter at Chanderiya, Chittorgarh district in Rajasthan which has been operationalised in 2005. With this capacity addition, HZL’s zinc production capacity has surged from 169,000 tpa to 411,000 tpa and it is now the sixth largest producer of zinc in the world. 1.11.5 During 2002 to 2005, world zinc consumption increased at an average annual compounded rate of 4.3%. India recorded an annual average growth of 8.3%. During 2002 to 2005, world lead consumption increased at an average annual compounded rate of 4.6%. India recorded an annual average growth of 7%. 1.11.6 The present per capita consumption of zinc in India is about 0.4 kg as against the world average of 1.3 kg. Consumption of zinc during 2005-06 was nearly 430,000 tonnes Per capita consumption of lead in India is about 0.24 kg. Consumption of lead during 2005-06 was nearly 239,000 tonnes. The lead demand is riding the automotive growth, mainly driven by storage batteries. 1.11.7 There was supply deficit of lead during the first four years of the Xth Plan, which was met mainly through imports. This is basically due to inadequate lead resources limiting primary metal production capacity build-up. The demand-supply gap can only be reduced either by enhancing primary metal production once new resources are identified or upsurge in recycling of secondaries. 3 1.11.8 In India, HZL is the major producer of cadmium and silver, which are recovered as by-products from the smelting of zinc-lead concentrates. It is estimated that the zinc- lead reserves of HZL contain nearly 27,600 tonnes of cadmium and 3,700 tonnes of silver.
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