Overview of Mining and Mineral Industry in India
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Mining, Minerals and Sustainable Development December 2001 No. 185 Overview of Mining and Mineral Industry in India Tata Energy Research Institute New Delhi This report was commissioned by the MMSD project of IIED. It remains the sole Copyright © 2002 IIED and WBCSD. All rights reserved responsibility of the author(s) and does not necessarily reflect the views of the Mining, Minerals and MMSD project, Assurance Group or Sponsors Group, or those of IIED or WBCSD. Sustainable Development is a project of the International Institute for Environment and Development (IIED). The project was made possible by the support of the World Business Council for Sustainable Development (WBCSD). IIED is a company limited by guarantee and incorporated in England. Reg. No. 2188452. VAT Reg. No. GB 440 4948 50. Registered Charity No. 800066 A suggested format for citing this report is as follows. T E R I. 2001 Overview of mining and mineral industry in India New Delhi: Tata Energy Research Institute. 94 pp. [T E R I Project Report No. 2001EE42] For more information about this report, please contact Centre for Environmental Studies T E R I Telephone +91 11 468 2100 or 468 2111 Darbari Seth Block E-mail [email protected] Habitat Place, Lodhi Road Fax +91 11 468 2144 or 468 2145 New Delhi – 110 003 / India Web www.teriin.org Table of contents Chapter 1 Introduction and objectives 1.1 Introduction ............................................................................01 1.2 Objectives.................................................................................01 1.3 Methodology........................................................................... 02 1.4 Report outline......................................................................... 03 Chapter 2 The Indian minerals sector 2.0 The Indian mineral sector ..................................................... 05 2.1 Introduction...................................................................... 05 2.2 History of India’s mineral sector .................................... 06 2.3 Current status of mining industry in India .................... 08 2.4 Economic issues................................................................ 19 2.5 The current regulatory and policy framework ................27 2.6 Small scale mining sector................................................ 48 2.7 Community issues.............................................................53 2.8 Environmental effects of mining .....................................67 2.9 Corporate investment considerations .............................79 2.10 Summary of the findings of the study........................... 84 Chapter 3 Sustainable development of mining areas 3.1 Priority areas for further research ........................................ 85 3.1.1 Developing tri-sector partnership in mining areas ..... 85 3.1.2 Mine closure: issue and options................................... 86 3.1.3 Small-scale mining: issues............................................ 88 3.2 Policy reforms for contribution towards sustainable development in mining areas................................................ 89 Annexures 1-10................................................................................. (i-xxxii) Abbreviations Introduction and objectives 1 1.1 Introduction This report has been prepared in response to the Terms of Reference (ToR) issued by the Director, Mining, Minerals and Sustainable Development (MMSD) project. The MMSD project ‘is an independent process of participatory analysis with the objective of identifying how mining and minerals can best contribute to the global transition to sustainable development’. The project is managed through the International Institute for Environment and Development (IIED), London, and funded, predominantly, by the Global Mining Initiative (GMI), a grouping of the major global mining houses. In this context, the report seeks to provide an overview of the mining and minerals sector in India and the issues that have a bearing on the role of the sector in the society, economy and environment of the country. 1.2 Objectives The focus of the country study is to prepare on overview of the mining (including processing of ore) and mineral industry and its impacts on sustainable development. The report would analyse the issues, which arise from people’s expectations of the mining industry. In broader terms, the study would cover the following: Contribution of mining towards economic development both at national and regional level; Contribution of mining to social development at national and local levels; Environmental impact of mining which would cover, among others, land use, management of waste, loss of biological diversity, etc; and Conflicts and the mechanism available for resolution of disputes. More specifically, the report covers the following: A general survey of the minerals sector in India - principal products - kinds of enterprises (multinationals, state companies, national private companies, artisanal mines) - employment in the sector and livelihoods Introduction and objectives 2 - value of production - marketing of production (domestic, export, value added) - importance in overall economy as measured by GDP, balance of payments, export earnings) - other general data Case examples of campaigns against unjust mining by social action groups; Case examples of good practices being adopted by companies for environmental protection and community development; List of relevant institutions with contact information. These would be NGOs focussed on mining activities from development, environmental, human rights or other perspectives; government institutions and officials concerned with the industry; labour organisations and their leaders; major companies, industry associations, community leaders in communities impacted by mining, etc. Recommendations on (i) priority areas for future research; (ii) priority changes in policy necessary to increase the contributions of this sector to sustainable development. 1.3 Methodology Due to the limited resources and time available for this study there was no opportunity to visit mining companies or to speak to a wide range of stakeholders. One visit was made to Nagpur for discussion with senior officers of a local coal company (WCL) and Indian Bureau of Mines. In addition, visits were made to concerned government departments, FIMI and other agencies. Detailed literature review was carried out. This material included publication of Indian Bureau of Mines, National Accounts Statistics and other relevant documents, DGMS reports, seminar / conference / workshop proceedings conducted during the last 5 years, NGO publications, etc. In addition, letters were addressed to mining companies and some NGOs for sharing information especially relating to environmental production, technology updation and social / community issues. There was response only from a few companies and one NGO. The report has been prepared based on the information / data collected and discussion with officials in different organization. T E R I Report No. 2001EE42 Introduction and objectives 3 1.4 Report outline Chapter 2 provides bulk of the information on the status of the mining and mineral industry in India. This covers exploration, production, processing, economic issues; policy and regulatory issues including institutional framework; small scale mining and environmental impacts and community issues. Chapter 3 lists the priority areas for further research / study including policy reforms, which are needed in the sector. T E R I Report No. 2001EE42 Title of the chapter 5 The Indian minerals sector 2 2.0 The Indian mineral sector 2.1 Introduction India is a country of large dimensions. It spreads over a geographical area of 3.29 million square kilometres, which is about 2.5 per cent of the globe and makes the country the seventh largest in the world. Its population of over 1,000 million ranks it the second largest only next to China. India is Asia’s third and world’s eleventh largest economy. The metallurgical and mineral industries constitute the bedrock of industrial development as they provide the basic raw materials for most of the industries. India produces as many as 84 minerals comprising 4 fuel, 11 metallic, 49 non- metallic industrial and 20 minor minerals. Their aggregate production in 1999- 2000 was about 550 million tonnes, contributed by over 3,100 mines (reporting mines) producing coal, lignite, limestone, iron ore, bauxite, copper, lead, zinc etc. More than 80 per cent of the mineral production comes from open cast mines and therefore, one must add the quantity of overburden to that of the mineral production in order to assess the total amount of annual excavation in India’s mining sector. The mining leases numbering 9,244 are spread over 21 States on about 13,000 mineral deposits occupying about 0.7 million hectares which is 0.21 per cent of the total land mass of the country. The aggregate value of the mineral production in 1999-2000 was more than Rs. 450 billion (approximately $10 billion). The distribution of the value of mineral production shows that fuel minerals accounted for about 82% (of which solid fuels 44% and liquid /gaseous fuels is 38%), metallic minerals about 8%, non-metallic minerals 4% and the balance 6% is contributed by minor minerals. The Mineral Policy opened the gates of Indian mineral industry to domestic and foreign investment, much of which was earlier reserved for the public sector. It aims to boost the country’s exploration and