Mine-opening I Coal

and Mineral sector

opportunities

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Foreword
The term ‘Energy Security’ couldn’t have been development, healthcare, education etc. are easily
more relevant given the unprecedented times we approachable for the remotely located villagers.
live in. Europe is on the cusp of an energy crisis and Many tribals have seen electricity supply for the
winter is coming. Amidst these, India has first time in their life.
committed to have 50% of its cumulative installed
The key to the success of a mining project lies in its
power generation capacity from non-fossil fuel-
initial years, when the various statutory permissions
based sources as per its NDCs for UNFCCC. While
are to be obtained including the land acquisition.
shifting to clean and sustainable energy is a
Once a mine is operational, it runs relatively
laudable vision, the growing energy demand, 80%
smoothly provided it is compliant with the
of which is still met by fossil fuels, cannot be
regulations. This report brings out the challenges
ignored. It has been estimated that to meet the
faced by the Indian coal & non-coal mining sectors
electricity demand over the next twenty years, India
with special focus on expediting the opening of
would need to add a power system of the size of
mines. Both the mining industry and the Central and
Europe.
State Governments can draw useful insights from
India’s ambition of becoming an economic this report and implement the suggestions to aid
superpower is to be built on strong energy security India’s fulfilment of its commitments at the
fundamentals. The coal & non-coal mining sectors UNFCCC and its economic ambitions.
hence, form the bedrock of this ambition. The
We thank KPMG in India for their support to
sectors not only contribute to meeting the energy
ISMAA in developing this paper. Our special
demands but also in creating employment
thanks to S/Shri Mahesh Pimpramule, Sanjeev
opportunities, revenue generation and improving
Prasad, Sanket Singh, Suvendu Bose and
the socio-economic status of the local villagers.
Niladri Bhattacharjee for their contributions to
Because of Mining sector, the infrastructure
this paper.

Rajendra Nirmal
Prasad Ritolia Chandra Jha
Former CMD, Former Chairman,
CCL & ECL Coal India Ltd.
Chairman, Organising Chairman, Technical
Committee Committee

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From identifying new growth
opportunities to effectively
addressing long-term E, S and G
challenges, KPMG in India can
assist.

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Contents
1. State of the Indian mining industry 3

2. Status of coal production in India 4

2.1. Number of coal mines in India 4

2.2. Status of operationalisation of coal mines 5

2.3. Coal production in India since 2010-11 till date (MT) 6

2.4. Import of coal in India in last 10 years 6

3. Status of other mineral mining & production in India 7

3.1. Number of reporting mineral mines 7

3.2. Status of auction of mineral mines from 2015/16 8

3.3. Production of selected minerals from 2017-18 to

2021-22 (excluding atomic & fuel minerals) 9

3.4. Import of ores and minerals in India in last 10 years 10

4. History, institution establishments, policy reforms/changes and its 11

implications on mining sector: post-independence

5. Top challenges for the mining industry in year 2022 14

6. Scope for improvement 15

7. Recommended EODB practices for early 17

operationalisation of the mines

7.1. Suggestions for central and state governments 17

7.2. Suggestions for mining companies 20

8. Summary 22

9. Glossary 24

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 01
State of the Indian
mining industry

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India is a mineral rich nation, endowed with
significant reserves of many key minerals. However,
even with the rich mineral potential, mining industry
in India contributed a mere 2.4 per cent of the
country’s GDP in 2018-19, far lower than other
comparing countries.
Various agencies have highlighted a strong growth
potential in the mining industry. The country has all
the ingredients in place – strong mineral resource,
entrepreneurial culture, well developed industries,
strong domestic demand supported by demographic
advantage. Therefore, to fulfill India’s mineral
potential, there is an urgent need to strengthen the
mining industry by reviewing and implementing
relevant global best practices. The growth in mineral
industry is identified as one of the fundamental
enablers for India to achieve double digit growth.
Such growth in the Indian mining industry will not be
possible without more large-scale reforms and
eliminating the various hurdles indicated by the
industry participants.
Mining land area
India is a major producer of crucial minerals such as
chromite, iron ore, coal, bauxite, etc. and with 3437
mining leases for 40 major minerals, total lease area
is approx. 312645.72 hectares.

Mineral production in India (USD billion)

Mineral Production USD Billion

20 17.48 18.21 17.53 17.9

14.14 15.17
15

10

0
FY 16 FY 17 FY 18 FY 19 FY 20 FY 21
Source: IBEF, Nov 21 report

Key statistics
Indian mining • Top mineral
producing
• GVA from states:
Mining & 1. Odisha
Quarrying:
• India is wholly
US$43 2. Rajasthan
or largely
• Private Billion during
self-sufficient 3. Chhattisgarh
• 1332 Sector 2021-22.
in
Reporting emerged as 4. Karnataka
• Bauxite
Mines* major player, • Growth of
• Chromite
contributing 14.3% from 5. Jharkhand
• Iron-Ore
*excluding 56% of total previous
• Limestone
atomic, fuel & value of year
minor mineral
minerals production*

Source: Annual report 2021-22, Ministry of Mines

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 02
Status of coal
production in India

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2.1. Number of coal mines in India
There are a total of 964 coal mines reported in India. As per statistics of Ministry of Coal, Govt of India, 309
coal mines with Central Government organisation having 8 subsidiaries, 36 CMSP coal blocks and 48 PSUs
coal blocks are in operational stage. Around 571 coal blocks are not operational yet. It includes 89 CMSP coal
blocks and 217 MMDR coal blocks which are yet to be auctioned/allotted. The details are mentioned in Table
No 2.1 & 2.2.

Table 2.2: Total number of coal mines in India

S. Central MMDR
Command area CMSP blocks PSU blocks Total
No Govt. Blocks blocks

AP command
1 0 3 0 0 3
area

BCCL command
2 38 4 3 0 45
area

CCL command
3 82 27 43 0 152
area

ECL command
4 67 35 25 0 127
area

5 MCL command area 40 37 28 0 105

NCL command
6 22 13 7 0 42
area

NEC command
7 5 1 0 0 6
area

SECL command
8 116 78 46 0 240
area

9 WCL command area 81 31 37 0 149

NER command
10 0 6 1 0 7
area

Other PSU coal

11 blocks command 0 0 4 84 88
area

Total 451 235 194 84 964

Source: CMPDI, OCBIS dashboard

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2.2. Status of operationalisation of coal mines
As on date, status of operationalisation of various coal blocks is as under:
Table 2.3: Status of operationalisation of coal mines

Coal blocks allocation status (CMSP blocks) PRC (MT)

Total no. of mines allocated 105/ 194 512.07

Mines having Mine Opening Permission (MOP) 47 171.55

Mines not having Mine Opening Permission 58 340.52

Out of 47 mines having mine opening permission, mines under coal

36 128.95
production

New mines likely to get Mine Opening Permission in 2022-23 11 57.57

New mines likely to start coal production in 2022-23 12 54.27

Annual target (2022/23) 130 MT

Coal blocks allocation status (MMDR blocks) PRC(MT)

Total number of mines allocated 18/ 235 41.87 (for 7 mines)

Mines having Mine Opening Permission 0 0

Coal blocks status (Central Government blocks) PRC(MT)

Total number of mines under operation 309/ 451

Annual target (2022/23) 700 MT

Coal blocks status (PSU blocks) PRC(MT)

Total number of mines under operation 48/ 84

Annual target (2022/23) 70 MT

Other mines annual target (2022/23) 11 MT

Source: MoC report on reforms & achievements of Ministry of Coal since 2014, Jun’ 22, MoC Monthly summary report for cabinet Jun’ 22

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2.3. Coal production in India since 2010-11 till date (MT)
In the last 10 years, coal production from Central Government coal blocks has been increased from 431.32
MT to 622.64 MT. PSU coal blocks have increased their production from 51.33 MT to 65.02 MT and coal
production from other and captive coal blocks has been increased from 50.04 MT to 89.65 MT. It is evident
that other and captive coal blocks have better growth rate in the last 10 years. The details are mentioned in
Table No 2.4.

Graph 2.4: Coal production in India since 2010-11 till date (MT)

Coal production in India since 2010/11

700
596.22
554.14 602.13
596.22
600 554.14
554.14
538.75
494.23
500
452.2 462.41
431.32 435.84

400

300

200

65.021
60.38 61.34 62.01 64.4 64.04 50.58
51.33 52.21 53.19 50.47 52.54
100 89.649
62.41 42.39 46.03 57.43 64.7 69.29
50.04 51.9 51.01 52.88 40.09

0
2010- 2011- 2012- 2013- 2014- 2015- 2016- 2017- 2018- 2019- 2020- 2021-
11 11 13 14 15 16 17 18 19 20 21 22

Central Government Other PSU Others/

coal blocks coal blocks Captive

Source: MoC Report- Company-wise production of raw coal during the last ten years, MoC Report- Production & supplies.

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2.4. Import of coal in India in last 10 years
To meet the domestic coal supply and demand, import of coking coal has been increased from 31.80 MT to
57 MT in the last 10 years. Also, the import of non-coking coal has been increased from 71.05 MT to 152 MT.
The details are mentioned in Table No 2.5.

Table 2.5: Year-wise import of coal and coke to India during the last ten years (MT)

Coke & others

Year Coking coal Non-coking coal Lignite
Coal products
2011-12 31.80 71.05 2.36 -
2012-13 35.56 110.23 3.08 0.000650
2013-14 36.87 129.98 4.17 0.001270
2014-15 43.72 174.07 3.29 -
2015-16 44.56 159.39 3.07 0.001050
2016-17 41.64 149.31 4.35 0.019120
2017-18 47.00 161.25 4.58 0.010410
2018-19 51.84 183.51 4.93 0.019370
2019-20 51.83 196.70 2.87 0.054250
2021-22 57 152 - -

Source: MoC Provisional Coal Statistics Report 2020-21

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 03
Status of other
mineral mining &
production in India

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India’s mining industry is characterised by a large number of small operational mines. There is a total of 3437
mining leases all over India. The number of mines which reported mineral production (excluding atomic, fuel,
and minor minerals) in India was 1,332 in 2020-21 as against 1,385 in the previous year. Out of 1,332
reporting mines, most of the mines reported are in Madhya Pradesh followed by Gujarat, Karnataka, Odisha,
Andhra Pradesh, Chhattisgarh, Tamil Nadu, Rajasthan, Maharashtra, Jharkhand and Telangana.

3.1. Number of reporting mineral mines

Table 3.1: Number of reporting mineral mines

Sector 2018- 19(p) 2019- 20(p) 2020- 21(p) 2021- 22(e)

All minerals* 1427 1385 1332 1245
Metallic minerals 610 602 588 525
Non-metallic minerals 817 783 744 720
*excluding atomic, fuel and minor minerals

Source: Annual Report 2021-22, Ministry of Mines, Government of India

3.2. Status of auction of mineral mines from 2015/16

There are 144 mineral mines which have been auctioned by the states since 2015/16. It is observed that the
state of Odisha has auctioned maximum mineral mines (38), followed by Karnataka (24), Maharashtra and
Madhya Pradesh (17 each) and Rajasthan (14). It was also found that the states of Tamil Nadu and Telangana
have not auctioned any mineral mine since 2015/16. The details are mentioned in Table No 3.2.1 and 3.2.2.

Table 3.1: Number of reporting mineral mines

Mineral 2015- 16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 Total

Limestone 4 5 10 5 4 9 15 52
Iron ore 1 7 2 9 17 1 11* 47
Gold 1 1 1 1 0 2 6
Manganese 0 1 0 1 3 0 3 8
Diamond 0 1 0 0 1 0 2
Bauxite 0 0 1 0 5 1 4 11
Graphite 0 0 0 3 2 0 5
Iron ore &
0 0 0 0 6 0 1* 6
Manganese
Chromite 0 0 0 0 3 0 3

Copper 0 0 0 0 2 0 2

Kyanite 0 0 0 0 0 0 1 1
Rock
0 0 0 0 0 0 1 1
phosphate

Total 6 15 14 19 43 13 36* 144

* 2 Iron Ore Block auctioned in 2019-20 in Odisha was forfeited. The same are re-auctioned in Sep’ 2021. Therefore, in total 146 mineral blocks were auctioned but in actual, the
net figure is 144.

Source: Annual Report 2021-22, Ministry of Mines, Government of India

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Table 3.2.2: Status of auction of mineral mines from 2015/16 (state-wise)

State-wise auction summary

State 2015-16 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 Total
Andhra Pradesh - 1 2 2 - - 3 8
Chhattisgarh 3 - 2 - - 2 2 9
Gujarat - - 3 - - 4 3 10
Jharkhand 2 1 1 3 - - - 7
Karnataka - 7 - 7 4 1 5 24
MP - 1 - 5 2 5 3 17
Maharashtra - - 2 1 10 - 4 17
Odisha 1 2 2 - 25 1 9* 38
Rajasthan - 3 2 1 2 - 6 14
Tamil Nadu - - - - - - - -
Telangana - - - - - - - -
Total 6 15 14 19 43* 13 36* 144

* 2 Iron Ore Block auctioned in 2019-20 in Odisha was forfeited. The same are re-auctioned in Sep’ 2021. Therefore, in total 146 mineral blocks were auctioned but in actual, the
net figure is 144.

Source: Annual Report 2021-22, Ministry of Mines, Government of India

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3.3. Production of selected minerals from 2017-18 to 2021-22
(excluding atomic & fuel minerals)
Since 2017/18, the growth in mineral production has been observed in Iron ore, Lead concentrate, Lead and
Zinc ore and limestone only. However, the production has been reduced in other minerals. The details are
mentioned in Table No 3.3.

Table 3.3: Production of selected minerals from 2017-18 to 2021-22 (excluding atomic & fuel minerals)

2021-22
2019-20 2020-21 2021-22
Minerals Unit 2017-18 2018-19 (up to Dec'
(P) (P) (E)
21) (P)
All Minerals
Metallic
Bauxite TONNE 22786106 23689619 21837183 20379556 13667914 18223885

Chromite TONNE 3480941 3970691 3929260 2863869 2487603 3316804

Copper
TONNE 141988 143668 124692 108719 77943 103925
concentrate
Gold
KG 1650 1672 1742 1126 744 992
primary
Iron ore TONNE 201424 206495 246081 204482 162653 216870
Lead
TONNE 306398 358369 351271 376924 242139 322852
concentrate
Manganese
TONNE 2599814 2832314 2904372 2688038 1781110 2374813
ore
Zinc
TONNE 1539657 1456804 1446823 1513996 997734 1330312
concentrate
Copper ore TONNE 3678002 4134702 3952418 3377850 2539327 3385769
Gold ore TONNE 549683 567291 596058 450611 303661 404881
Lead &
TONNE 12613866 13752295 14479032 15455343 10437504 13916672
zinc ore
Silver KG 557691 679386 609340 705795 76 102
Tin
KG 16758 21212 15546 16865 9133 12177
concentrate
Non-metallic
Diamond CARATS 39699 38437 28816 13917 138 184
Garnet TONNE 158276 123404 552 9307 3453 4604
Lime shell TONNE 14765 7534 4600 0 0 0
Limestone THT 340417 379975 359331 349170 268229 357639
Magnesite TONNE 195055 146875 97684 78144 69658 92877
Phosphorite TONNE 1515645 1421086 1400186 1455627 885657 1180876
Sillimanite TONNE 81638 69919 13236 11110 2505 3340
Wollastonite TONNE 153049 184063 124757 103902 72814 97085

(P): Provisional; (E)Estimation

Source: Annual Report 2021-22, Ministry of Mines, Government of India

Increased

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3.4. Import of ores and minerals in India in last 10 years
In case of selected minerals, it is observed that import of minerals i.e., Bauxite, Chromite, Limestone,
Magnesite, Manganese ore, Sillimanite and Wollastonite has been increased since 2016/17. However,
import has been reduced for Copper ore and concentrate, Iron ore, Lead ore and concentrate, Tin ore and
concentrate, Zinc ore and concentrate and Garnet (Abrasive). The details are mentioned in Table No 3.4.

Table 3.4: Import of ores and minerals from 2016-17 to 2020-21(P)

Commodity Unit 2016-17 2017-18 2018-19 2019-20 2021-21 (p)

Bauxite Ton 1894927 1461494 2254595 2246681 3034041

Chromite Ton 154226 160504 162663 124693 156211

Copper Ores
Ton 1143216 1488163 823938 821555 415136
& Conc.

Diamond ** ** ** ** **

Garnet
Ton 2286 2256 422 391 345
(Abrasive)

Iron Ore THT 4607 8706 12807 1245 766

Lead Ores &

Ton 6217 2220 1499 3283 5473
Conc.

Limestone Ton 18300357 20827698 24397169 25639508 22797801

Magnesite Ton 142598 229629 464365 365053 364577

Manganese
Ton 1943815 3627741 2784473 4316572 4058590
Ore

Sillimanite Ton 24 17 99 609 606

Tin Ores &

Ton 68 57 6 ++ 2
Conc.

Wollastonite Ton 3482 11461 26483 22616 24049

Zinc Ores &

Ton 1771 -- 1422 101 804
Conc.

P: Provisional, --: Nil, ++ : Negligible **: Not additive

Source: Annual Report 2021-22, Ministry of Mines, Government of India

Increased Decreased

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 04
History, institution
establishments, policy
reforms/ changes and its
implications on mining
sector: post-independence

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I. In 1947, after Independence, the mining sector mines, 48 coal mines have been allocated to
was elevated under successive five-year plans. the regulated sector i.e. power, 22 coal mines
to the non-regulated sector (NRS) i.e. iron &
II. In 1956, the Central government brought
steel, cement and captive power as well as 37
various reforms. The Geological Survey of
coal mines for sale of coal.
India (GSI) was strengthened. Indian Bureau of
Mines was established, and mineral X. Long term stability in operations - As per the
exploration was further intensified. new policy, extension of period of grant of EC
and mining lease up to 50 years (20-30 earlier)
III. In 1972, Mineral Exploration Corporation
has been provided.
(MECL) was established for exploration
activities w.r.t coal, iron ore, limestone, XI. Enable expansion planning- Provision of EC
dolomite and manganese ore. Expansion up to 50 per cent production
enhancement of coal blocks and 20 per cent
IV. In 1993, Foreign Direct Investment (FDI) was
expansion for other mineral blocks having
introduced in the mining sector after the
5-star rating (iron, manganese, bauxite,
announcement of the New Mineral Policy. In
limestone) without public hearing has been
February 2000, 100 per cent FDI was allowed
provided.
V. In 2014, Ministry of Mines notified revised
XII. Increase exploration activity – The Central
royalty rates and dead rents.
government has got the power to guide and
VI. In 2014, M B Shah Commission report was instruct about the utilisation of funds by DMF.
submitted to the Supreme Court. Many
XIII. Opportunity to acquire - Provision has been
violations were reported in the state of Goa
made to transfer mineral concession for
and Odisha. There were noteworthy violations
auctioned mines.
where mines were operating illegally without
Environment Clearance, Forest Clearance, XIV. Commercial auction of coal on revenue share
mining plan and consent to operate. Non- mechanism - Auction of commercial mining on
compliance of the conditions of statutory revenue sharing mechanism was launched on
clearances was observed. Many mines were 18 June 2020 by Hon’ble Prime Minister.
suspended, and production was put on halt. Under this scheme, a total of two tranches
have been successfully completed and the
VII. In 2015, Mine and Mineral (Development &
third tranche is currently under process. From
Regulation) Act 1957 was amended.
these two tranches, a total of 28 coal mines
Relaxations on duties was done and
have been successfully auctioned for which
reservation of areas for PSUs was removed.
vesting order has been signed for 27 coal
State Mineral Funds and District Mineral
mines.
Foundations were established.
XV. In 2021, Mineral Conservation and
VIII. In 2015, Mineral Auction Rules were notified.
Development (Amendment) Rules were
Auctions were allowed to be conducted
notified by the Ministry of Mines for
electronically and mining auctions were
conservation of minerals, systematic and
conducted by the state governments.
scientific mining, development of minerals in
IX. Allocation of Mines under Coal Mines (Special the country for environment protection.
Provisions) Act, 2015 - In light of the judgment
XVI. A one-time opportunity to surrender non-
and order of the Hon‘ble Supreme Court
operational mines without any financial penalty
cancelling allocation of 204 coal blocks out of
to Government companies will enable
218 coal blocks allocated since 1993. To
promising stakeholders to operationalise mines
overcome the acute shortage of coal in core
- On 09 May 2022, Ministry of Coal provided a
sectors such as steel, cement and power
one-time opportunity (window opened for 3
utilities, which are vital for the development of
months only) to Government companies to
the country and to mitigate the hardships on
surrender non-operational mines due to
household consumers, medium and small
technical reasons without imposition of
enterprises, cottage industries, and to
financial penalty. It will enable promising
augment coal production by allocating coal
stakeholders to develop and function non-
mines to new allocates, the CMSP Act, 2015
operational mines without any further delay.
was enacted w.e.f 30 March 2015. Under the
provisions of the CM(SP) Act, 2015, 107 coal XVII. Increased competition - As per the new policy,
mines have been successfully allocated. Of captive mines may sell up to 50 per cent of
these 107 coal mines, 47 have been allocated their annual mineral production outside in the
through e-auction and 60 have been allotted to market.
government companies. Out of these 107 coal

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XVIII. In April 2022, Cabinet approved policy for use
of land acquired under the Coal Bearing Areas
(Acquisition & Development) Act, 1957 - This
reform will unlock the non-minable land for
development and setting up of infrastructure
relating to coal and energy. The land which is
no longer suitable or economically viable for
coal mining activities; or lands from which coal
has been mined out / de-coaled and such land
has been reclaimed will be used for this
purpose. The land will be used to set up coal
washeries, conveyor systems, coal handling
plant, thermal and renewal power projects,
coal development related infrastructure
including CA land, constructing railway sidings;
R&R settlement of project affected families,
providing right of way, coal gasification and
coal to chemical plants; and to set up or
provide for energy-related infrastructure. It will
help to increase investment and job creation in
the coal sector.
XIX. Single Window Clearance- In June 2022,
Ministry of Coal has established a Single
Window Clearance system, through which
allottees can apply for requisite clearances
with a single registration interface. The portal
is proposed to map applications and their
respective process flows for grant of all the
statutory clearances required (covering Central
Ministries ministries as well as the state
government).
XX. Mine Opening Permission without CTO -
Provision has been made for grant of Mine
Opening Permission without CTO permission
on case-to-case basis. However, allottees
need to take CTO prior to commissioning the
mining operations.
XXI. Public consultation for EC of old recommended
cases – Public consultation was allowed by
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getting response in writing for coal blocks
where public hearing was previously held, but
EC was not granted due to pending FC-I
permission on a case-to-case basis. This has
helped to reduce time and cost of the allottee.
XXII. EC appraisal of coal blocks at state level (SEAC
/ SEIAA) - EC appraisal of coal blocks at state
level (SEAC / SEIAA) was allowed for coal
blocks having lease area up to 500 Ha. It was
earlier allowed for 150 Ha only. Most of the
cases will be dealt and granted Environmental
Clearance at state level only.
XVIII. Rescheduling postponed Public Hearing-
Recently, directives were issued for
rescheduling postponed Public Hearing within
45 days of publishing of information of initial
public hearing and delegation of powers to
District level officers from DM/DC to supervise
Public Hearing process.
XIX. Wildlife Management Plan (WLMP) and Soil
Moisture Conservation Plan (SMC) payments
for FC-II permission – FC-II permissions of
many coal blocks were pending for preparation
of approved WLMP and SMC plans. WLMP
plan are expected to be completed in 2-3
years. In a strategic move, MoEF &CC issued
guidelines dated 7 June 2022 that where such
plans are not prepared, 2 per cent (WLMP) and
0.5 per cent (SMC) of project cost may be
realised by allottee and FC-II permission may
be granted to avoid further delays.
XX. FC (process) transfer taken up in FAC for old
cases – The cases where FAC was held before
2015 but decision was not concluded due to
cancellation of coal blocks, again proposals are
being considered in FAC directly on a case-to-
case basis. Coal blocks were considered in
FAC and were granted FC-I permission.
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 05
Top challenges for
the mining industry
in year 2022

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 2022 Rank 2021

Environmental risks, including new

1 Commodity price risk
regulations

Commodity price risk 2 Global pandemic

Community relations and social licence

3 Economic downturn/uncertainty
to operate

Community relations and social licence to

Political instability / Nationalisation 4
operate

Global trade conflict 5 Environmental risks, including new regulations

Ability to access and replace reserves 6 Permitting risk

Permitting risk 7 Political instability

Supply chain risks 8 Access to capital, including liquidity

New Talent crisis 9 Ability to access and replace reserves

Regulatory and compliance changes/

10 Regulatory and compliance changes/burden
burden

Ref: KPMG Global Mining Outlook 2022

The top challenges recognised for the mining sector It is also an opportunity since rapid increase in
for 2022 indicates that environmental risks, including demand of renewable sources of energy has
new regulations like Environment, Social & heightened the supply for new age minerals like
Governance (ESG), Business Responsibility Lithium, Nickel, Manganese, Graphite, Cobalt,
Sustainability Reporting (BRSR), etc. will be a key Vanadium, Titanium, Platinum, Chromium, Zirconium,
factor to be addressed by the mining industry. Mining Silicon, Uranium etc. for use in cleaner tech and EV
industry is already complying with existing batteries with favourable policy environment.
Environment Clearance (EC) / Forest Clearance (FC) /
It is also not difficult to see how the adoption of new
Wildlife (WL) norms of Ministry of Environment,
technologies could help mining companies reduce
Forest & Climate Change (MoEF&CC). However,
their operational carbon emissions. If mining
disclosure on ESG (Environment, Social &
equipment and trucks could run on electric batteries
Governance) parameters will surely impact focus of
(or hydrogen, as is beginning to be trialed in
lenders, investors and regulatory establishments
Australia), rather than diesel or petrol, the carbon
which will in turn impact transformation of mining
gains could be significant. In the current scenario of
companies with respect to their ESG goals. Also, in
last six months, mining companies have observed
the wake of last year’s Conference of the Parties
major challenges in development and
(COP) 26 summit, countries have committed to
operationalisation of their mines due to an upsurge in
ambitious net zero and decarbonisation targets, and
political instability, global trade conflict and supply
for these to become a reality, companies will have to
chain issues.
adopt stretching targets too. This places a focus on
industries with a high carbon footprint and
environmental impact, such as mining.

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 06
Scope for
improvement

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There is a need to revamp the mining industry in This initiative will need a comprehensive review
India through implementation of global best across multiple dimensions, including –
practices, elimination of bottlenecks and current
Policy and legislative framework
policy and regulatory hurdles in order to give boost to
(covering Central mining acts, rules
the industry and provide a source of global
and relevant ecosystem acts and rules;
competitiveness to its user industries.
also state specific acts and rules)
For this purpose, there is a need to undertake a
comprehensive policy review encompassing Funding and financing related
following aspects. aspects for promotion of the
i. Review of current policy and regulatory regime industry and value-addition
and its impact as observed during the last few
years. Environment and Centre–
ii. Mapping of the global geo-political direction and sustainability state
correlate the same with the vision for the Indian related aspects coordination
mining sector. (Star Rating, mechanism
DMF, etc.)
iii. Discussion with industry participants in India
across the value chain to identify pros and cons
Skill
of the current system and suitable action points.
development Research
iv. Understanding the perspective of global mining with review of and
players and determining key factors that influence existing policies/ development
their investment decisions. institutions
v. Policy and regulatory benchmarking with key
global mining economies, identification of gap
areas, identification of constraints. Information Technology for mineral
administration and mining operation
vi. Evaluating global competitiveness of user
industries in the light of key minerals use (e.g.,
steel industry, aluminum industry). Technology intensity in mining (nature
vii. Designing a future policy and regulatory structure and size of mining and beneficiation
to achieve the identified target. machinery)
viii. Developing a framework for effective
co-operation of Central and state initiatives to Institutional framework and their
enhance sustainability in mining. adequacy (e.g. IBM, DGMS, NIRM,
etc.)
ix. Developing an action plan along with the
implementation schedule.
Events and mechanisms of
The above scope needs to be covered across the
integration/collaboration with other
value chain of the mining industry encompassing-
relevant ministries/departments
Mineral exploration and associated policy changes
Integration with end use industry
Mineral exploration and
development and global
associated policy changes
competitiveness.

Mineral allocation and administration Safety and security aspects

ensuring ease of doing business

Mine development, operations, sales, An initial exercise should be directed at prioritising

closure including associated rules, focus areas. Focus should be given to areas that have
processes, duties and levies higher likelihood of contributing to improvement in
the perception of investors and those which are likely
to get implemented quickly. To do this, a telephonic /
Value addition related policies. an online survey of industry participants should be
undertaken.

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 07
Recommended EODB
practices for early
operationalisation of
the mines
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7.1. Suggestions for central and state governments
I. Key highlights include

Coal sector Mineral sector

• Infrastructure • Rationalisation of stamp duty
development for payable at the time of award of
evacuation of mining leases
enhanced coal
• Elimination of difference
production from
between captive and non-captive
Central Government
mines
and private blocks.
• Introduction of seamless
• Incentivising coal
composite exploration cum-
gasification/liquefication
mining-cum-production regime
through rebate in revenue
share. • Auction of 500 mining blocks
• Auction of Coal Bed • Joint auction of coal and bauxite
Methane (CBM) extraction blocks.
rights from Central
Government’s mines.

ii. Infrastructure status - Grant ‘Infrastructure’
status to the mining sector. This will help mining
projects to obtain financial support from
financial institutions, especially for the financing
of prospecting, exploration and mine
development activities
iii. Pre-embedded statutory clearances - Mineral
blocks must be put for auction by the state
governments only with pre embedded statutory
clearances, which will be transferred to the
successful bidder post auction.
iv. Digital governance for better efficiency,
transparency to improve EoDB - All mineral
states should establish digital governance
system including auction portal, mine
management portal, digitisation of routine tasks
and internal processes, single window clearance
system, surveillance and monitoring (drone-
based, GPS enabled), etc. This will empower
state governments to efficiently control,
regularise and enable smooth operations of their
mineral mines.
v. Integrated data management - India’s mining
sector needs better data management practice
as there is hardly any integrated data source
available today that is considered as reliable and
recognised source of authentic and real-time
data on any commodity or mine. Ministry of
Mines, Government and Ministry of Coal,
Government of India can take the lead, and drive
timebound mandate to create such databases.
vi. Incentivise exploration of mineral
blocks - To encourage mineral exploration and
production in India, mineral blocks should be
incentivised. Actionable reports and National
Mineral Exploration Trust (NMET) expenditure
should be expedited and increased. Regional
and detailed exploration should be carried out
over the entire geologically conducive mineral
bearing areas of the country in a time-bound
manner.
vii. Alternatives for global participation - In
order to attract global exploration companies
with modern state-of-the-art technologies,
alternative mechanisms for allocation of mineral
leases, other than forward auction, should be
implemented. Exploration agencies must be
provided an attractive option to convert their
Reconnaissance Permit (RP) to Prospecting
Licence (PL) to Mining Lease (ML), without
having to match the highest bid quoted during
the auction process.

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VII. Alternatives for global participation - In
order to attract global exploration companies
with modern state-of-the-art technologies,
alternative mechanisms for allocation of
mineral leases, other than forward auction,
should be implemented. Exploration agencies
must be provided an attractive option to
convert their Reconnaissance Permit (RP) to
Prospecting Licence (PL) to Mining Lease
(ML), without having to match the highest bid
quoted during the auction process.
VIII. Transparent system for auction/
allotment - During auction/allotment of
minerals and coal blocks, already granted
clearances and pending approvals with status
quo are also vested to the new allottee.
However, after allotment, it has been
observed in many cases that the status of
vested clearances has been modified. There
are many challenges, especially in the transfer
of already acquired land and vested CA land.
Once the land is vested by the respective
authority, it is observed that major patches are
under encroachment, arbitration, etc. It
subsequently affects the overall planning and
investment of the bidder. Therefore prior to
vesting, auction/allotment, the respective
authority should examine the details in
conformity with other statutory ministries. A
transparent system will attract more investors
for auction/allotment of mineral and coal
mines.
IX. R&D and innovation - India needs to create
its own ecosystem for building the culture of
R&D and innovation for future sustenance.
Notwithstanding the multi-faceted benefits
that can be achieved through technology
adoption, it is still quite difficult for Indian
mining companies to place R&D/innovation
high on their short-term agenda when they are
dealing with other fundamental risks and
adversities to even survive and stay in the
business. Hence, the immediate onus is
perhaps on the governments (Central and
states) to take the initiatives and keep
budgetary provisions for this. Government
ministries like MoM, MoC, MoS, and state-
level Departments of Mines/ Geology/Steel/
Industries can be the first movers in this
regard and drive collaborative research on
issues affecting the mining sector.
X. Collaborative research - In order to drive
collaborative research, create collaborative
platforms like the CRC Mining in Australia to
bring together all stakeholders. The
Governments, alongside crucial contribution
from academia, research organisations,
regulators, OEMs, suppliers, etc. are a must
that will help create a conducive atmosphere
for promotion of an innovation culture at a
broader and deeper scale.
XI. National Land Utilisation Policy - Enable
long-term planning of mineral excavation, a
National Land Utilisation Policy needs to be
evolved and suitable areas with significant
mineral potential have to be identified and
reserved for the mining industry, to ensure
availability of prospective areas for mineral
exploration for future generations in line with
the principle of Intergenerational Equity.
XII. Delinking of EC and FC permission - EC
permission should be granted irrespective of
grant of FC permission. It is evident that
without FC permission, a mine cannot be
operationalised. However, to facilitate early EC
permission and its depending CTE and CTO
permission from State Pollution Control Board,
these two permissions should be delinked. It
will help to process these permissions
parallelly and assist in early operationalisation
of the mine.
XIII. Mining in non-forest area should be
allowed after FC-I - It has been addressed by
all stakeholders in the past also that at least
mining should be allowed in non-forest areas
after grant of FC-I permission (In Principle
approval). It will help mine owners to
operationalise their coal blocks at the earliest.
XIV. Condition for suitability of CA land to be
incorporated during FC-II permission - For
streamlining the approval process,
identification and handing over of CA land
should be enforced during FC-II stage only so
that more time can be availed to user agency
in identification of CA land and at least speedy
disposal of FC-I proposal can be made. CA
land condition may be included in FC-I
In-Principle order.

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XV. Availability of CA land - CA land bank should
be made readily available by state
governments for early disposal of FC
permission. In case the land is not available or
are under quo status, user agency should be
allowed to identify CA land in the neighboring
states also. To achieve the goals of COP 26
for forest cover in India and facilitate
availability of CA land by user agency,
Accredited CA land should be allowed
irrespective of its area and size.
XVI. Alignment of EAC with the approved Mine
Plan of MoC - There are many cases where
during final appraisal of EC permission by
EAC, queries have been issued for revision of
Mine Plan. Mine Plan is approved by Ministry
of Coal considering all requisite principles and
guidelines. It takes time to prepare and
approve a Mine Plan. However, queries for the
revision of Mine Plan at the later stages of EC
appraisal delays the project for further period.
It should be avoided, and synchronisation
should be built within the statutory authorities
for early disposal of cases.
XVII. One step process for EC and CTE
permission - On 5 February 2020, MoEF&CC
issued a memorandum incorporating
guidelines to process EC and CTE permission
parallelly. However, it is not implemented yet.
It will save considerable time and cost of user
agency in development and operationalisation
of mines.
XVIII. Additional queries stipulated by EAC and
FAC - Additional queries beyond the scope of
ToR/ FC checklist should not be raised in later
stages. It causes considerable delay in grant
of these clearances for longer periods
XIX. Expansion/ Enhancement of coal and
other mineral production - Enhancement of
coal production is allowed for 50 per cent of
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the existing capacity. However, the expansion
is allowed on satisfactory compliance of EC
permission in three phases by MoEF&CC
(20%, 40%, 50%). It should be allowed for 50
per cent in one phase only for compliant coal
projects so that time and cost can be saved
for development and operations of coal mines.
Enhancement of mineral production (iron,
manganese, bauxite and limestone) is allowed
up to 20 per cent of production capacity with
public consultation. It should also be allowed
up to 50 per cent without any public
consultation.
XX. Land Acquisition under CBA 1957 -
Government should acquire land under the
CBA Act, 1957 and then lease it to private
players to expedite the development of coal
blocks.
XXI. Public Hearing for EC cases and Gram
Sabha for FC cases - Public hearing and
Gram Sabha are time bound activities.
However, many projects have been delayed
due to law and order issues, over wanted R&R
compensations, etc. at the level of state
government to conduct peaceful and
successful Public Hearing and Gram Sabha.
State governments should be strengthened in
all perspectives so that these requisite
approvals should not be delayed on account of
these challenges.
XXII. Establishment of Project Monitoring Units
(PMUs with Central and state
governments) - PMU has been pretty
successful at Central level for monitoring of
mines for their early operationalisation. Such
PMUs should be established at the level of
state government also so that efficient
monitoring for early development of these
mines can be done, and mines can be
operationalised without any further delay.
31
7.2. Suggestions for mining companies
I. Digital transformation: Digital interventions have the potential to add value in terms of cost savings,
revenue enhancement, increased productivity and improved safety and sustainability for workers as
indicated below:

The overall mining value chain can be segregated under three different core areas and support services.
Potential key digital solutions of relevance in each of the core areas and the support services are highlighted
below:

Operation Processing Evacuation & logistics

Design Loading Screening

Mining Sales &
& & & Benificiation Stockyard Transportation
operations marketing
planning hauling crushing

OHS CSR
HR

Finance Maintenance

Support
Contrct &
procurment services Security &
surveillance

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II. For long-term business planning, companies
should embark on a path of sustainable cost
reduction and profit maximisation, through
critical analysis of operations. For example,
de-leveraging stretched balance sheets should
be a key priority, to ensure adequate liquidity
and solvency in a sustainable manner; or
divestment of projects/subsidiaries, which do
not meet expected profitability thresholds.
Large mining companies may consider
diversification options (both related and
unrelated) to build resilience in case of
unforeseen disruptions. This may include a
special focus on inorganic moves, especially
outside India.
III. For early development and operationalisation of
the mines, concerned stakeholders (government
officials, mining company, etc.) have to expedite
and put up all efforts. There is a huge pressure
on domestic mineral supply due to increasing
mineral price at international level. For realising
the goal of becoming a self-dependent nation, it
is time to reform our EoDB policies and bring
together all stakeholders, investors, PMUs,
MDOs for early operationalisation of mineral
blocks.

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 08
Summary

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India is a mineral rich nation and has immense
potential to be the pioneer in the competitive global
mining market. Various agencies have highlighted a
strong growth potential in the mining industry. We
have all the ingredients in place – strong mineral
resource, entrepreneurial culture, well developed
industries, strong domestic demand supported by
demographic advantage.
Mineral production is a critical economic activity
globally, with significant contribution to employment
generation, government revenues, downstream value
addition and overall multiplier effect on the economy.
The growth in mineral industry is identified as one of
the fundamental enablers for India to achieve double
digit growth. Such growth in India’s mining industry
will not be possible without more large-scale reforms
and eliminating the various hurdles indicated by the
industry participants.
Government of India has tried to provide impetus to
the industry with multiple regulatory reforms.
However, these changes are not without their share
of issues and unintended consequences. Therefore,
to fulfill India’s mineral potential, there is an urgent
need to strengthen the mining industry by reviewing
and implementing relevant global best practices.
In recent times, the following observations are
strengthened by the available data:
1. There has been significant increase in coal import
2. There has been significant decrease in the export
of coal
3. The number of operational coal mines is less than
non-operational coal mines
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4. Import of bauxite, chromite, limestone, magnesite,
manganese ore, sillimanite and wollastonite has
increased. However, import has reduced for
copper ore & concentrate, iron ore, lead ore &
concentrate, tin ore & concentrate, zinc ore &
concentrate and garnet (abrasive).
5. Exports of copper ore & concentrate, iron ore, lead
ore & concentrate and manganese ore have
increased. However, export has been reduced for
zinc ore & concentrate, garnet (abrasive), bauxite,
chromite, limestone, magnesite, sillimanite and
wollastonite.
6. Mineral block auction has increased significantly.
The top challenges recognised for the mining sector
include environmental risks, including new
regulations like Environment, Social & Governance
(ESG), Business Responsibility Sustainability
Reporting (BRSR) etc., and these need to be
addressed by the mining industry. Some major
reforms are required in the field of environment and
sustainability, policy and legislative framework,
funding & financing, safety & security aspects,
research & development, information technology,
technology intensity in mining, skill development and
institutional framework.
There is a huge opportunity for the mining sector to
cater the supply and demand of all minerals for major
industries like steel, power, construction,
automobiles, packaging, renewable energy, etc., and
digital interventions have the potential to add value in
terms of cost savings, revenue enhancement,
increased productivity and improved safety and
sustainability for workers.
35
 09
Glossary

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 Andhra Pradesh Mineral Development SMC Soil Moisture & Conservation Plan
APMDC
Corporation
Business Responsibility & Sustainabi- Indian Council of Forestry Research &
BRSR ICFRE
lity Report Education

CA Compensatory Afforestation JWG Joint Working Group

CAT Plan Catchment Area & Treatment plan LA Land Acquisition

CBA Act Coal Bearing Acquisition Act 1957 MDO Mine Developer and Operator

CCO Coal Controller Office MECL Mineral Exploration Corporation

The Coal Mines (Special Provisions) ML Mining Lease

CMSP
Act, 2015
Central Mine Planning & Design Insti- ML (E) Mining Lease Execution
CMPDIL
tute Ltd. Mine and Mineral (Development &
MMDR
COP Conference of the Parties Regulation) Act
MoC Ministry of Coal
CTE Consent to Establish
Mo- Ministry of Environment, Forest &
CTO Consent to Operate EF&CC Climate Change

DMF District Mineral Foundation MOP Mine Opening Permission

DVC Damodar Valley Corporation MTPA Million Ton per Annum

DGMS Directorate General of Mines Safety NALCO National Aluminum Company Limited

EAC Expert Appraisal Committee NIRM National Institute of Rock Mechanics

EC Environmental Clearance NMET National Mineral Exploration Trust

EDS Essential Details Sought NOC No Objection Certificate

EIA Environment Impact Assessment OCBIS Online Coal Block Information System

EMP Environment Management Plan OCP Open cast project

EoDB Ease of Doing Business PH Public Hearing

ESG Environment, Social & Governance PMUs Project Monitoring Units

EV Electric Vehicles PPP Public-Private Partnership

FAC Forest Advisory Committee PRC Peak Rated Capacity

FC Forest Clearance R&R Resettlement and Rehabilitation

FDI Foreign Direct Investment WLMP Wildlife Management Plan

FRA Forest Right Act 2005 SEAC State Expert Appraisal Committee
State Environment Impact Assess-
GDP Gross Domestic Product SEIAA
ment Authority
GPS Global Positioning System SPCB State Pollution Control Board

GSI Geological Survey of India ToR Terms of Reference

IBM Indian Bureau of Mines USD United States Dollar

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KPMG in India contacts
Niladri Bhattacharjee
Partner, Transformation-C&O-M&M
M: 90510 61645
E: niladri@kpmg.com

home.kpmg/in
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