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Business Plan of Iron Ore mining activity

For
MOKSHAGNA MINERALS (P) Ltd.,
IRON ORE
Iron Ore: About 98% of iron ore is used to make steel - one of the
greatest inventions and most useful materials ever created. While the
other uses for iron ore and iron are only a very small amount of the
consumption, they provide excellent examples of the ingenuity and the
multitude of uses that man can create from our natural resources.
Powdered iron: used in metallurgy products, magnets, high-frequency
cores, auto parts, catalyst. Radioactive iron (iron 59): in medicine,
tracer element in biochemical and metallurgical research. Iron blue: in
paints, printing inks, plastics, cosmetics (eye shadow), artist colors,
laundry blue, paper dyeing, fertilizer ingredient, baked enamel finishes
for autos and appliances, industrial finishes. Black iron oxide: as
pigment, in polishing compounds, metallurgy, medicine, magnetic inks,
in ferrets for electronics industry. Major producers of iron ore include
Australia, Brazil, China, Russia, and India.

Estimated iron ore production in million tons for 2004


according to U.S. Geological Survey[2]

Producti
Country
on
China 280
Australia 220
Brazil 220
India 110
Russia 95
Ukraine 66
United States 54
South Africa 40
Canada 31
Sweden 22
Venezuela 18
Kazakhstan 17
Iran 16
Mauritania 10
Other countries 40
Total world 1250
Geothite

Limonite
Iron ores are rocks and minerals from which metallic iron can be
economically extracted. The ores are usually rich in iron oxides and
vary in color from dark Grey to rusty red. The iron itself is usually found
in the form of magnetite (Fe3O4), hematite (Fe2O3), limonite or siderite.
Hematite is also known as "natural ore". The name refers to the early
years of mining, when certain hematite ores contained 66% iron and
could be fed directly into steel-making blast furnaces. Iron ore is the
raw material used to make pig iron, which is one of the main raw
materials to make steel. 98% of the mined iron ore is used to make
steel.[1] Iron ore cargoes may affect magnetic compasses. Normally,
loading rates are very high, preplanning of ballasting operation is
essential.
The total recoverable reserves of iron ore in India are about 9,602
million tones of haematite and 3,408 million tones of magnetite.
Madhya Pradesh, Karnataka, Bihar, Orissa, Goa, Maharashtra, Andhra
Pradesh, Kerala, Rajasthan and Tamil Nadu are the principal producers
of iron ore in the country.

Background
Iron (Fe) is a metallic element and composes about 5% of the Earth’s
crust. When pure it is a dark, silvery-gray metal. It is a very reactive
element and oxidizes (rusts) very easily.
Iron is one of the three naturally magnetic elements; the others are
cobalt and nickel. Iron is the most magnetic of the three. The mineral
magnetite (Fe3O4) is a naturally occurring metallic mineral that is
occasionally found in sufficient quantities to be an ore of iron.
The principle ores of iron are Hematite, (70% iron) and Magnetite, (72
% iron). Taconite is a low-grade iron ore, containing up to 30%
Magnetite and Hematite.
Hematite is iron oxide (Fe2O3). The amount of hematite needed in any
deposit to make it profitable to mine must be in the tens of millions of
tons. Hematite deposits are mostly sedimentary in origin, such as the
banded iron formations (BIFs). BIFs consist of alternating layers of
chert (a variety of the mineral quartz), hematite and magnetite. They
are found throughout the world and are the most important iron ore in
the world today. Their formation is not fully understood, though it is
known that they formed by the chemical precipitation of iron from
shallow seas about 1.8-1.6 billion years ago, during the Proterozoic
Eon.
Taconite is a silica-rich iron ore that is considered to be a low-grade
deposit. However, the iron-rich components of such deposits can be
processed to produce a concentrate that is about 65% iron, which
means that some of the most important iron ore deposits around the
world were derived from taconite. Taconite is mined in the United
States, Canada, and China.

Hematite
Hematite 2

Magnetite
Name
The name iron is from an Old English word isaern which itself can be
traced back to a Celtic word, isarnon. In time, the "s" was dropped from
usage.

Sources
It is estimated that worldwide there are 800 billion tons of iron ore
resources, containing more than 230 billion tons of iron. It is estimated
that the United States has 110 billion tons of iron ore representing 27
billion tons of iron. Among the largest iron ore producing nations are
Russia, Brazil, China, Australia, India and the USA. In the United States,
great deposits are found in the Lake Superior region. Worldwide, 50
countries produce iron ore, but 96% of this ore is produced by only 15
of those countries.

Uses
In India, almost all of the iron ore that is mined is used for making
steel. The same is true throughout the world. Raw iron by itself is not
as strong and hard as needed for construction and other purposes. So,
the raw iron is alloyed with a variety of elements (such as tungsten,
manganese, nickel, vanadium, chromium) to strengthen and harden it,
making useful steel for construction, automobiles, and other forms of
transportation such as trucks, trains and train tracks.
While the other uses for iron ore and iron are only a very small amount
of the consumption, they provide excellent examples of the ingenuity
and the multitude of uses that man can create from our natural
resources.
Powdered iron: used in metallurgy products, magnets, high-frequency
cores, auto parts, catalyst. Radioactive iron (iron 59): in medicine,
tracer element in biochemical and metallurgical research. Iron blue: in
paints, printing inks, plastics, cosmetics (eye shadow), artist colors,
laundry blue, paper dyeing, fertilizer ingredient, baked enamel finishes
for autos and appliances, industrial finishes. Black iron oxide: as
pigment, in polishing compounds, metallurgy, medicine, magnetic inks,
in ferrite’s for electronics industry.

Substitutes and Alternative Sources


Though there is no substitute for iron, iron ores are not the only
materials from which iron and steel products are made. Very little scrap
iron is recycled, but large quantities of scrap steel are recycled. Steel's
overall recycling rate of more than 67% is far higher than that of any
other recycled material, capturing more than 1-1/4 times as much
tonnage as all other materials combined.
Some steel is produced from the recycling of scrap iron, though the
total amount is considered to be insignificant now. If the economy of
steel production and consumption changes, it may become more cost-
effective to recycle iron than to produce new from raw ore.
Iron and steel face continual competition with lighter materials in the
motor vehicle industry; from aluminum, concrete, and wood in
construction uses; and from aluminum, glass, paper, and plastics for
containers

Mining is the extraction of valuable minerals or other geological


materials from the earth, usually (but not always) from an ore body,
vein, or (coal) seam. Materials recovered by mining include bauxite,
coal, copper, gold, silver, diamonds, iron, precious metals, lead,
limestone, nickel, phosphate, oil shale, rock salt, tin, uranium, and
molybdenum. Any material that cannot be grown from agricultural
processes must be mined. Mining in a wider sense can also include
extraction of petroleum, natural gas, and even water.
Steps in the mining process
1. Prospecting * to locate ore
2. Exploration to defining the extent and value of ore where it was
located ("ore body")
3. Conduct resource estimate to mathematically estimate the extent and
grade of the deposit
4. Conduct mine planning to evaluate the economically recoverable
portion of the deposit
5. Conduct a feasibility study to evaluate the total project and make a
decision as whether to develop or walk away from a proposed mine
project. This includes a cradle to grave analysis of the possible mine,
from the initial excavation all the way through to reclamation.
6. Development to create access to an ore body
7. Exploitation to extract ore on a large scale
8. Reclamation to make land where a mine had been suitable for future
use

*Prospecting is the act of physically searching for minerals, fossils,


precious metals or mineral specimens, and is essentially analogous to
fossicking.
Prospecting is synonymous in some ways with mineral exploration
which is an organized, large scale and at least semi-scientific effort
undertaken by mineral resource companies to find commercially viable
ore deposits, however prospecting is increasingly restricted to describe
the activities of the amateur and hobbyist who search for small
quantities of ore or mineralisation.
Prospecting is increasingly a hobby or vocation undertaken as a form of
relaxation and diversionary activity by modern people however in the
past prospecting was the only way new mineral deposits were found.
Prospecting is quite intensive physical labor, involving a considerable
amount of traversing (traditionally on foot or on horseback), panning,
sifting and outcrop investigation, looking for tell-tale signs of
mineralisation.
Mining techniques
Mining techniques can be divided into two basic excavation types:
1. Surface mining 2. Sub-surface mining

• Open-pit mining • Drift mining

• Quarrying • Slope mining

• Strip mining • Shaft mining

• Placer mining • Hard rock mining

• Mountaintop removal • Borehole mining

1. Surface Mining : is a type of mining used to extract mineral


deposits that are close to the surface.
In most forms of surface mining, heavy equipment, such as
earthmovers, first remove the overburden - the soil and rock above the
deposit. Next, huge machines, such as dragline excavators, extract the
mineral.
Surface mining generally leaves large devastated areas, called spoil
banks, unless the land is reclaimed.

• Open Pit Mining refers to a method of extracting rock or minerals


from the earth by their removal from an open pit or borrow. The term is
used to differentiate this form of mining from extractive methods that
require tunneling into the earth. Open-pit mines are used when
deposits of commercially useful minerals or rock are found near the
surface; that is, where the overburden (surface material covering the
valuable deposit) is relatively thin or the material of interest is
structurally unsuitable for tunneling (as would be the case for sand,
cinder, and gravel). Where minerals occur deep below the surface—
where the overburden is thick or the mineral occurs as veins in hard
rock— underground mining methods are used to extract the valued
material. Open-pit mines are typically enlarged until the mineral
reserve is exhausted.

• Quarrying : A quarry is a type of open-pit mine from which rock or


minerals are extracted. Quarries are generally used for extracting
building materials, such as dimension stone. Quarries are usually
shallower than other types of open-pit mines.
• Strip Mining : is the practice of mining a seam of mineral ore by first
removing all of the soil and rock that lies on top of it (the overburden).
It is similar to open-pit mining in many regards. Strip mining is also
used to extract the oil-impregnated sand in the Athabasca Tar Sands.
Strip mining is only practical when the ore body to be excavated is
relatively near the surface. Since colossal quantities of material often
need to be removed, the excavating machinery used in strip mining is
often among the largest such equipment ever constructed; drag line
excavators and bucket-wheel excavators are common examples. There
are two forms of strip mining; area strip mining, which is used on fairly
flat terrain, to extract deposits over a large area. Contour strip mining,
usually used in hilly terrain, involves cutting terraces in mountainsides
following the contour of the land.

• Placer Mining : (pronounced "plass-er") refers to the mining of


alluvial deposits for minerals. This may be done by open-pit or open-
cast mining or by various forms of tunneling. Excavation may be
accomplished using water pressure (hydraulic mining), surface
excavating equipment or tunneling equipment.

• Mountain top Removal : In mountaintop removal mining, the


targeted land is clear-cut of all trees. Miners then use explosives to
remove the overburden (the rock and soil that lies above a Iron seam),
exposing the Iron Ore. The overburden is pushed into a nearby valley
or hollow, creating a pile below called valley fill. Meanwhile, machinery
removes the coal, and it is transported to a processing plant and
washed. Millions of gallons of waste from coal processing, called slurry,
is often stored nearby in open pools restrained by earthen dams.
Because coal usually exists in multiple seams separated by rock,
miners can repeat this process over a dozen times on a single
mountain, lowering its height with each seam mined.

2. Sub-surface mining or underground mining refers to a group of


techniques used for the extraction of valuable minerals or other
geological materials from the earth. In contrast to the other main type
of excavation, surface mining, sub-surface mining requires equipment
and/or manpower to operate under the surface of the earth.
In underground coalmines, another major environmental risk is fires.
Hundreds of coal mines smolder in the United States, China, Russia,
India, South Africa, and Europe. The inaccessibility and size of these
fires many impossible to extinguish or control.

Mining industry
While individual entrepreneurs or small business can sometimes
conduct exploration and mining, most modern-day mines are large
enterprises requiring large amounts of capital to establish.
Consequently, large, often multinational, mostly publicly listed
companies dominate the industry.

Market and Sales


Orientation : Initially we are targeting only the National market which
has got a high potential users.

Production Volumes : Projecting to extract 30000 tons / Month


for the first year and further want to increase the production by 10%
per Anum.

Efficiency: Targeting to reach 60% of efficiency in Year 1 and increase


it by 10% Annually.

Major Assumptions : As the site location is closer to the national


market (Chandrapur and Hyderabad area plants are with in 300 Kms
from Site) with loading point of Rack being only 15 Kms and roads are
already existing with the site.

Rationale for Benefits: Reduces the cost of Material by 25% to the


end market due to closer distance, shorter transportation periods,
which also enables us to grow in the market by 15%

Unit Prices : With analyzed Fe(T) and Tumbler Index the selling price
at current market situation is RS. 1150 Ex Site
Potential Users : Iron ore is basically used by Sponge Iron* plants for
smelting in preparation of an intermediatory product for steel
manufacturers.

*Sponge iron is the product created when iron ore is reduced to


metallic iron, usually with some kind of carbon (charcoal, etc), at
temperatures below the melting point of iron. A spongy mass results
(sometimes called a bloom), consisting of a mix of incandescent
wrought iron and slag.
The sponge would then be removed from the furnace in which it was
created and repeatedly beaten with heavy hammers and folded over to
remove the slag, oxidize any carbon or carbide and welding the
wrought iron together. This treatment would usually create a wrought
iron with about 3 % slag and a fraction of a percent of other impurities.
Further treatment could add back in controlled amounts of carbon,
allowing various kinds of heat treatment (e.g. "steeling").

Sales : There are More than 30 Sponge Iron Companies with in 300
Kms radius from the proposed site, the daily accumulated consumption
of Iron Ore for this companies is Approximately 10000 tons

Present Suppliers : where as in the present situations the Sponge


Iron companies are majorly getting there raw material from Hoespet
sector which is 1000 Kms and spending around 60% more on
transportation

Potential Users

Sr.N Company Name & Address Daily Distance from


o Requirement Site
1 M/S Gopani Iron & Power 1020 Tons/ Day 265 Kms
(India) Private Ltd. Fact:A-
22, MIDC Growth Center,
Tadali, Chandrapur,
Maharashtra
2 M/S Siddi Bali ISPAT, MIDC 680 Tons/Day 265 Kms
Growth Center, Tadali,
Chandrapur, Maharashtra
3 M/S Lloyds Metals & 510 Tons/Day 258 Kms
Engineers Ltd. Fact:A/2,
MIDC Area Ghughus,
Chandrapur, Maharashtra
4 M/S Gupta Metallics & Power 510 Tons/Day 210 Kms
Ltd Fact: Rajhura,
Chandrapur, Maharashtra
5 M/S Ashirwad Steels & 340 Tons/Day 150 Kms
Industries Ltd Fact:
Peetampalli Approach Road
Vill&Post Velliminedu, Man :
Chityal, Nalgonda Dist AP
6 M/S Lakshmi Gayatri Iron & 340 Tons/Day 110 Kms
Steel Pvt Ltd, Fact: Vill:
Cheekatigudem Man:
Kethepalli , Nalgonda Dist,
AP
7 M/S Kumar Mettulargical 340 Tons/Day 140 Kms
Corporation Ltd Fact:
Chityal, Nalgonda Dist AP
8 M/S Jaycee Sponge Profiles 170 Tons/Day 260 Kms
Pvt. Ltd Fact:Kothur IDA
Village:Kothur
Mahuboobnagar Dist
9 M/S Amoda Iron & Steel Pvt 340 Tons/Day 200 Kms
Ltd., Fact: Jaggayyapet,
Krishna Dist
10 M/S Reactive Metals of 340 Tons/ Day 260 Kms
India Ltd, Fact: Kothur IDA
Village : Kothur
Mahaboobnagar Dist
Total 3690 Tons/Day With in 300 Kms
Radius

Note: There are another 30 companies with in 300


Kms Radius with an Appr. Consumption of 10000 Tons/
Day

Nearest Competitors

Sr.No Address Capacity Distance from


Site

1 Vill & Mand : Bayyaram 400 Tons/Day 70 Kms


Dist Khammam, AP

2 Vill: Puligommi Man: 600 Tons/Day 350 Kms


Veldurthi Dist: Kurnool, AP

3 HRG Mines Vill: Sandoor Dist: 3000 Tons/Day 1100 Kms


Bellary Karnataka ( Export)

4 Baldotia Mines Vill Hoespet, 2000 Tons/ Day 1150 Kms


Dist Bellary Karnataka (Export)

5 Chaplin Mines Dist Cuddapah 500 Tons/Day 650 Kms

Future Competitors

Sr.No Address Capacity Distance from


(100%) Site

1 Village : Yerraballi, Mand: 1000 Tons/Day 70 Kms


Bheemdevarpalli Dist:
Karimnagar

2 APMDC, Vill& Man: 600 Tons/Day 70 Kms


Bayyaram, Dist Khammam

3 Village: Mupparam, Mand: 400 Tons/Day 65 Kms


Dharmasagar Dist: Warangal

Investment Requirements & Project


financing
COST MODEL
Life Cycle Phase
Cost Impacts
Under all
Scenarios
Acquisition and Operational Phase
Startup Year 0 and Year 2 and Year 3
Year 1

One Time Investment – Rs.


12 Lakhs
Site Rs 50 per Ton Extracted
Acquisition

R
e JCB’s, Trucks and
Maintenance Cost – 12.5
s Machinery Crusher Rs 272
%
o Lakhs *
u
r
c
e
s ML Rs 70 Lakhs
Expenses

Initial Surveying – Rs 15
Lakhs
Transportation – Rs 10 Maintenance 20%
Services Lakhs
Office &Site
Establishments- 33 Lakhs

Estimate of Total Project Cost

Preliminary & Pre Operative :


Geological Survey: Rs 15 Lakhs

Site Maps : Rs 2 Lakhs

Transportation : Rs 14 Lakhs

Site Establishment: Rs 18 Lakhs

Office establishment:Rs 15 Lakhs

Vehicles : Rs 10 Lakhs

Mining License: Rs 70 Lakhs

Total 1 Rs 144 Lakhs

Machinery:

JCB’s *3 : Rs 87 Lakhs (3*29 Lakhs Each)

Tippers*10 : Rs 90 Lakhs (10*9 Lakhs Each)

Crusher : Rs 95 Lakhs (1000 Tons Capacity)

Essential Tools: Rs 5 Lakhs (Spares & accessories)

Testing Equipment: Rs 6 Lakhs

Erection Charges: Rs 10 Lakhs (Installation)

Working Capital: Rs 40 Lakhs

Total 2 : Rs 333 Lakhs

Grand Total
Total 1 : Rs 144 Lakhs
Total2 : Rs 333 Lakhs
Rs 477 Lakhs

Miscellaneous expenditure will be 5% of project cost

Revenue Generation
⇒ Projecting to Extract 36000 Tons/Month

⇒ Each Ton of Material extraction costs Rs 900 (Extraction Rs


700 + Levy Rs 50 + Other Expenses Rs 150)

⇒ With Analyzed Fe(T) and TI the selling price at current


Market situations is Rs 1150 Ex site

⇒ Turn Over/Month = Selling price * Extracted Material = Rs


1150 * 36000 = Rs 41400000

⇒ Turn Over/Anum = Rs 41400000 * 12 = Rs 496800000 ( Rs


49.68 Crores)

Profit Ratio

⇒ Gross Profit /Month = Rs 250 * 36000 = Rs 9000000

⇒ Maintenance 10% = Rs 900000

⇒ Taxes 12.5% = Rs 1017500

⇒ Net Profit = Gross Profit – ( Maintenance + Taxes) = Rs


9000000- Rs 1917500 = Rs 7082500/ Month

⇒ Assuming to Reach 60% of projected target = Rs 7082500 *


60% = =Rs 4249500

⇒ Net Profit / Anum = Rs 50994000 (Rs 5.09 Crores App)

Note : Even if the production is 60 % of the projected production


the Break even point is Reached
FINANCIAL STRUCTURE

INR %
Total Budget 477,00,000
Promoters 95,00,000 20%
Personal Loan 6,50,000 1%
Advances 150,00,000 32%
Venture Capital 60,00,000 11%
Bank Loan 85,00,000 18%
Vehicle Finance 80,50,000 17%
Total 477,00,000 100%

Prom oters

Personal
Loan
Advances

Venture
Capital
Bank Loan

Vehicle
Finance
Cost Scheduling
Rs in Lakhs
Sr.N Particulars Already To Be Total Cost
o Incurred Incurred

A Geological Survey Rs 7 Rs 8 Rs 15

B Site Maps Rs 1.3 Rs 0.7 Rs 2

C Transportation Rs 8 Rs 6 Rs 14

D Site Establishment Rs 3 Rs 15 Rs 18

E Office Rs 2 Rs 13 Rs 15
Establishment

F Vehicles Rs 10 -------- Rs 10

G Mining Lease Rs 6 Rs 64 Rs 70

H JCB’s 3 No’s ---------- Rs 87 Rs 87

I Tippers 10 No’s ---------- Rs 90 Rs 90

J Crushers ---------- Rs 95 Rs 95

K Essential Tools ---------- Rs 5 Rs 5

L Testing Equipment ---------- Rs 6 Rs 6

M Erection Charges ---------- Rs 10 Rs 10

N Working Capital ---------- Rs 40 Rs 40

TOTAL Rs 37.3 Rs 439.7 Rs 477

Means of Finance

Rs in Lakhs
Sr.N Particulars Amount Amount Total
o Already Raised Proposed to
be Raised

A Capital Rs 37.3 Rs 57.7 Rs 95

B Venture Capital -------- Rs 60 Rs 60

C Personal Loans Rs 3 Rs 3.5 Rs 6.5

D Advances --------- Rs 150 Rs 150

E Bank Loan --------- Rs 85 Rs 85

F Vehicle Loans ---------- Rs 80.5 Rs 80.5

TOTAL Rs 40.3 Rs 436.7 Rs 477

Schedule of Implementation

Sr.N Particular Date of Expected date of


o Commencement Completion

A Acquisition of ML Nov 2006 Feb 2007

B Development of Site Feb 2007 Mar 2007

C Machinery Foundation Jan 2007 Feb 2007

D JCB’s & Tippers Jan 2007 Mar 2007

E Arrangement of Power Jan 2007 Jan 2007

F Arrangement of Water Jan 2007 Jan 2007


G Plant & Machinery Jan 2007 Mar 2007

H Trail Runs Mar 2007 April 2007

I Commercial May 2007


Production

Projections of Performance, Profitability and


Repayment

Production

Capacity Year 1 Year 2 Year 3 Year 4 Year 5

720000 360000 504000 720000 100% 100%


Tons/Yr. Tons/Yr. Tons/Yr. Tons/Yr.
70% 100%
100% 50%

Sales
Rs in Lakhs
Heading Year 1 Year 2 Year 3 Year 4 Year 5

Sales Inc Rs 4140 Rs 6300 Rs 9000 Rs 9000 Rs 9000


Misc.

Less Tax Rs 496.8 Rs 756 Rs 1080 Rs 1080 Rs 1080


12%

Net Sales Rs 3643.2 Rs 5544 Rs 7920 Rs 7920 Rs 7920

Cost Of Production
Rs in
Lakhs
Descripti Year 1 Year 2 Year 3 Year 4 Year 5
on

Levy Rs Rs 180 Rs 252 Rs 360 Rs 360 Rs 360


50/Ton

Direct Rs 180 Rs 252 Rs 360 Rs 360 Rs 360


Labor Rs
50/Ton

Maintenan Rs 180 Rs 252 Rs 360 Rs 360 Rs 360


ce Rs
50/Ton

Wages Rs 360 Rs 504 Rs 720 Rs 720 Rs 720


Rs 100/Ton

Power & Rs 360 Rs 504 Rs 720 Rs 720 Rs 720


Fuel Rs
100/Ton

Consumabl Rs 180 Rs 252 Rs 360 Rs 360 Rs 360


es Rs
50/Ton

Manufactur Rs 1440 Rs 2016 Rs 2880 Rs 2880 Rs 2880


ing
Expenses
Rs 400/Ton

Depreciatio Rs 360 Rs 504 Rs 720 Rs 720 Rs 720


n&
Repairs
Rs 100/Ton

Other Rs 360 Rs 504 Rs 720 Rs 720 Rs 720


Expenses
Rs 100/Ton

TOTAL Rs 3600 Rs 5040 Rs 7200 Rs 7200 Rs 7200


Rs
1000/Ton

Gross Profit
Rs in
Lakhs
Year 1 Year 2 Year 3 Year 4 Year 5

Net Sales Rs 3643.2 Rs 5544 Rs 7920 Rs 7920 Rs 7920

Production Rs 3600 Rs 5040 Rs 7200 Rs 7200 Rs 7200


Rs
1000/Ton

Gross Rs 43.2 Rs 504 Rs 720 Rs 720 Rs 720


Profit

Net Profit
Rs in Lakhs
Year 1 Year 2 Year 3 Year 4 Year 5

Gross Profit Rs 43.2 Rs 504 Rs 720 Rs 720 Rs 720

Interest Rs 22.55 Rs 17.5 Rs 15.5 Rs 4.5 ---------


10%

Working --------- Rs 100 Rs 144 Rs 144 Rs 144


Capital

General Rs 8 Rs 252 Rs 360 Rs 360 Rs 360


Expenses

Term Loans Rs 12 Rs 75 Rs 90 Rs 45

Net Rs 1.3 Rs 59.5 Rs Rs Rs 216


Profit 110.5 166.5

ROLE OF THE GOVERNMENT


Department of Mines
The Department of Mines is responsible for the survey and exploration
of all minerals( other than natural gas and petroleum), for mining and
metallurgy of non-ferrous metals like aluminum, copper, zinc, lead,
gold, nickel, etc., and for the administration of the Mines and Minerals (
Development and Regulation) Act, 1957 in respect of all mines and
minerals, other than coal, natural gas and petroleum.

The Department of Mines has jurisdiction over Geological Survey of


India and Indian Bureau of Mines, both of which are subordinate
offices.
CONTRIBUTION OF OTHER GOVERNMENT ORGANISATIONS
Geological Survey of India (GSI)

The GSI is the principal agency responsible for the assessment of


geological and regional mineral resources of the country. GSI was
established in 1851 and is one of India’s oldest investigative agencies
in the field of earth sciences. Its areas of operation encompass
scientific surveys and research, for locating mineral resources. GSI
operates through six regional offices and four specialized wings -
marine, coal geophysics, airborne surveys and training.

The GSI has to its credit geological mapping, covering an area of


approximately 3.146 million sq.km, or 94 percent of the area of India.
The maps are on a 1:63,360/ 1:50,000 scale, the data having been
synthesized to produce 1:2,000,000 scale geological maps of India,
which have been correlated with the global set up as per international
standards. The GSI is also actively involved in the research and
development of mapping and exploration techniques. It has set up a
chain of modern petrological paleontological, chemical, mineralogical,
geochronological, geotechnical and geophysical laboratories in its
different operational bases, and offers its facilities and services on
payment. Geological maps and data are available with GSI on a
commercial basis.
Indian Bureau of Mines (IBM)
IBM is the principal government agency responsible for compiling
exploration data and mineral maps and for providing access to the
latest information is respect of mineral resources in the country. IBM
has both regulatory as well as service functions.

IBM offers technical expertise and proven experience in the fields of


geology, mine planning and feasibility studies. The geological services
of IBM include survey and preparation of mine plans, preparation of
geological plans, preliminary geological appraisal of mineral properties,
including the formulation of an initial scheme of detailed exploration
with estimate of cost and preliminary reconnaissance, quick survey to
determinate potential areas out of large properties, etc.

IBM’s technical consultancy services include the preparation of techno-


economic feasibility reports, evaluation of feasibility reports prepared
by other consultants and organizations etc., production planning and
grade control in working mines, evolution of flowcharts for mineral
benefaction and agglomeration to scale up to large commercial plants
and engineering design data for commercial plants.

Besides these technical consultancy services, IBM also performs


regulatory functions, namely:- enforcement of Mines and Minerals
(Regulation and Development) Act, Mineral Concession Rules, Mineral
Conservation and Development Rules.
IBM disseminates statistical information on mines, minerals, metals
and mineral based industries through its various publications which are
available for sale on commercial basis.

Mineral Exploration Corporation Limited (MECL)


MECL is a public sector company, which undertakes detailed
exploration of various minerals/ores by drilling and exploratory mining.
It is also engaged in proving the existence of reserves for their
eventual exploitation. Exploration is taken up both on a promotional
basis on behalf of the Government of India and on contractual basis for
other agencies.