India’s mining sector appears to be on a firm turnaround path after years of tumult with production of metallic minerals growing by nearly 20 per cent in the first eleven months of 2015-16 and total mineral output rising by 8.2 per cent, official data showed.
While the value of the mineral production is lower than previous years owing to lower global prices, the recovery in quantum of output signals a higher demand for raw materials and augurs well for a sustainable industrial recovery.
Mining sector output had contracted for three successive years till 2013-14, and made only a marginal recovery in 2014-15 as output of non-metallic minerals like limestone continued to shrink. In 2015-16, both metallic and non-metallic minerals reported robust growth. Mining has an over 14 per cent weightage in the Index of Industrial production or IIP, which has registered a 2.6 per cent growth between April 2015 and February 2016.
Industrial output grew 2 per cent in February, after three months of contraction, largely driven by 10 per cent rise in the production of electricity and a 5 per cent increase in minerals.
“Metallic minerals’ output has grown from 14.24 crore metric tonnes to 17.05 crore metric tonnes between April 2015 and February 2016. Iron ore output has risen significantly as many of the mines that were shut in recent years have started opening again, in states like Goa and Odisha,” Union Mines Secretary Balvinder Kumar told The Hindu . “This marks what we believe is a complete turnaround for the mining sector,” he emphasised. The government expects mineral output to rise further in 2016-17 as six new mines allotted via auctions could start operations. Several more mines would be auctioned and some of the mines affected by the Supreme Court embargo could come back into production.
“The output should grow further this year as we expect at least 45 new mines to be auctioned and 17 mines that didn’t evince any bids the first time around, to be re-tendered,” Mr. Kumar said, adding that states have been asked to revisit the bidding parameters for such mines. Most blocks that didn’t get any bids in the first round of auctions pertained to limestone mines. The Mines Secretary pointed out that many iron ore mines in Karnataka are yet to re-open and mineral production would get a further fillip as and when those mines restart.
In 2011, the Supreme Court had banned all 168 iron ore mines in Karnataka for violating the law and damaging the environment. In 2013, the court allowed 117 mines involved in minor violations to re-start and cancelled licences for 51 mines where serious violations took place, requiring their permits to be auctioned. The state had told the SC that it will auction the permits for 15 such mines by 2015-16.
An internal mines ministry note states that the value of mineral output declined by 11.4 per cent between April 2015 and February 2016, compared to the same period a year ago. “This may be attributed to the fall in international prices,” Mr Kumar said.
The biggest growth in output was seen in chromite (36.1 per cent), lead concentrate (33.7 per cent), copper concentrate (31 per cent) and Bauxite (27.4 per cent). Non-metallic minerals output grew 2.1 per cent in the first eleven months of 2015-16, with phosphorite production rising nearly 12 per cent and limestone growing over 2 per cent, after years of decline.
