INDUSTRY: NATURAL RESOURCES

Mining in India

India produces as many as 87 minerals, which includes fuels, metallic, non-metallic, atomic, and
minor minerals. On the basis of the volume of production, India ranked 4th amongst the mineral
producer countries, and hence it continues to be an important sector for the Indian economy.

With its abundant resources, the country is the world’s largest producer of mica blocks and mica
splittings. India exported 78,000 tonnes of Mica in 2006 which increased to 136,000 tonnes in
2015, an increase of 75%.

Mica is a group name for a shiny composite with key properties that it can resist sudden
changes in temperature, is lightweight, flexible, and strong. Muscovite is by far the most
frequently mined type of Mica with its chemical composition silica (SiO2) – 45%; alumina
(Al2O3) – 38%; potassium oxide (K2O) – 12%; others – 5%.

Opportunities and Challenges:

Mica’s capability to absorb or reflect light can help in protecting against UV rays and it also
enables the material to give a decorative effect. Making it a highly useful raw material for the
cosmetic industry.
But, all that shimmers is not shining in the mining industry! This Shimmer that reaches in the
cosmetic tubes of customers is always in the limelight, but for all the wrong reasons. What
makes this industry notorious is the revelations over the years that in India, mica is mined by
hand. And, to top that children are mining the mica as it is easier for them to enter a narrow
mine.

There are severe hazards that these children working in the mica mines have to face:

a) Continuous working in such harmful conditions can cause infections and even lung
damage.
b) International child rights organisation Terre Des Hommes claimed in 2018 that more
than 22,000 children are employed in this sector and as per the survey of India’s
National Commission for Protection of Child Rights (NCPCR), more than 5,000 children
have to drop out of school to work as scavengers in three mica mining districts of
Jharkhand and Bihar.
c) Mining areas are more vulnerable to child malnutrition.
d) Migrant children are further exploited by mafias and even trafficked since many of them
are homeless.
e) If the mine crumbles, there is a high risk of death.

It is not just illegal for children to be involved in such activities but an ethical burden on
companies as well. 70% of these mines are not regulated by the government. The end
consumers are skeptical in linking themselves to such companies who do not have ethical
practices. As a result, many big names in the cosmetic industry have started looking for
alternatives to mica and some have stopped the use of it completely.

The Problem:

XYZ Limited manages iron ore mining all around India and they have recently acquired 20 mica
mines. Unfortunately, the bad perception of Mica Mining in the entire industry has shown its
adverse effects on XYZ’s stocks, it has made XYZ limited one of the biggest losers among the
10- member S&P BSE India Metal Index that’s slid by 18%. Shareholders have shared their
concerns publicly mentioning that the decision to acquire mica mines is wrong and they are
concerned about further plunge in stocks. You are a part of the senior management team of
XYZ Limited who had earlier advocated acquiring these Mica mines and now you are
answerable to the board of governors who are concerned due to the rising conflicts and are
keen on finding a sustainable solution.

You are saddened by the companies’ reluctance to buy mica and now have to figure out the
loopholes in the mica supply chain process and define standard operating procedures. If the
requirement for mica will decrease in the coming years, it won’t just impact the top and bottom
lines of XYZ limited but also the livelihood of many people who are dependent on mica mining,
they will be left abandoned if mining from these sources has to stop.
Deliverables:

1) Create a Standard operating procedure and workflow for XYZ Limited to set up these
mining plants ensuring all ethical and moral obligations. Make necessary assumptions
and use your research to suggest a strategy for the next three years for the legal
extraction of the material from these mines.

2) It is evident that XYZ Limited will be able to sell mica to the cosmetic industry at a higher
cost than the local contractors.
a) Devise a B2B marketing strategy to publicise the availability of legal and ethical
mica
b) Chalk out a communication plan for XYZ limited to reach out to both the cosmetic
industries and the general public as a whole to increase their brand image and
business
c) Give an implementation plan and roadmap for the above strategies along with
financials and ROI

3) Illegal mica mining has been going on for ages and there exist cartels, goons, and local
contractors which will create havoc when XYZ Limited steps in.
a) Suggest strategies to ensure that campaigns organised by these cartels/goons
do not affect the business and operations. Comment on the feasibility of each
strategy on the ground level along with a few examples.
b) Create a plan to safeguard the livelihoods of the families that are involved in this
illegal mining and have been affected so much over the years. Devise a
communication strategy targeted especially towards these families and
households to connect with them emotionally and get them on board with this
idea.

4) Outline the operating costs for legal extraction of the material and thereafter the financial
implications of your proposed actions.

Wishing you all the Best!