INDIAN

INDIAN MINERAL
MINERAL
INDUSTRY
INDUSTRY –– A
A SWOT
SWOT
ANALYSIS
ANALYSIS
BY
Professor Ajoy K. Ghose
 introduction
• The global economic meltdown and tsunami
wave of recession reaching many shores, it
is worthwhile to undertake a situational
analysis of Indian mineral industry to map
its future and identify roadblocks to
development. Indian mineral industry has
had a hoary legacy with a thriving mineral
industry some 4500 years old which
focused on sustainable mineral resource
 Introduction
• management. Even if the minerals sector
was not an “engine of growth” per se, it
played a key role in the past and continues
to do so even in the post-independence
era. Currently, the mineral economy is on
the throes of a renaissance and it is only
apposite that we undertake a SWOT
exercise to help define an action agenda
for growth.
 Indian Mineral sector
• Since Independence in 1947, there has
been a remarkable leap forward in the
volume and value ofdomestic mineral
production and India ranks amongst the
top ten mineral producers in the world.
The value of domestic mineral production
soared from Rs.580 million in 1947 to
Rs.2050,000 million in 2011, registering a
phenomenal growth of some 3500 times
and contributing to nearly 2.5% of GDP.
 Indian Minerals Sector
• The nation produces today 89 minerals,
including a host of atomic minerals and the
aggregate tonnage of mineral raw
materials produced domestically exceeds
1500 million tonnes, including sand, gravel
and aggregates. Table I is a synoptic
overview of the minerals sector, including
some key indicators of the sector.
 Indian Minerals Sector
• Table-I
• Share of Raw materials in GDP – 2.5%
• Number of Mines:
• - hard coal mines: 559
of which 26 are in private sector
• - lignite mines : 14
• - metalliferous/others : > 6000
 Indian Minerals Sector
• - Mines submitting statutory reports-
around 2600
• - Labour Force:
• - coal mining : around 490,000
• - metalliferous /others : 180,000
• - Oil/natural gas/CBM : 26,000
• - Total,incl. small mines :1.1 million
 Indian Minerals Sector
• Key Indicators:
• Raw materials consumption per capita/year
– 1.1 tonne
• Per capita value of Minerals produced-
Rs.1680
• Value of raw materials produced /sq.km of
land surface- Rs.620,000
 Indian Minerals sector
• The minerals sector is indisputably one of
the fundamental strengths of the national
economy, with its share of contribution to
GDP and employment. India was the
world’s largest producer of mica blocks and
mica splittings. It ranks 3rd in the
production of coal and lignite, 2nd in
barytes and Chromite, 4th in iron ore, 6th in
bauxite and 5th in manganese ore.
 Indian Minerals Sector
• Life Indices of major minerals, in terms of
resource inventory according to UNFC is
very large and sustainability of the sector
is assured in the long term. For coal, the
life index is >200 years; for bauxite it
is>204 years;for iron ore it is > 105 years;
for chromite it is > 47 years;for
manganese ore it is > 113 years, and for
limestone it is > 360 years.
 Indian Minerals Sector
• The State sector has been straddling the
industry for nearly 5 decades accounting
for nearly 85% of the aggregate value of
minerals produced. New winds of change
have lately been sweeping the minerals
sector and some of the state mining
enterprises have been disinvested. To
meet the changing needs of the minerals
sector in the context of domestic and
 Indian Minerals Sector
• global economic environment, a National
Mineral Policy,2008 was announced to
provide a conducive environment for
investment and technology flows,
transparency in allocation of concessions,
development of data base of mineral
resources and tenements, improved value
addition through mineral processing and
the need for a new R & R Policy.
 A SWOT ANALYSIS FOR
INDIAN MINING
• A SWOT exercise is basically an
introspective look to assess the strengths,
weaknesses, threat and opportunities of
any organization/industry/institution to be
able to reinvent the same and chart a new
future. A generic analysis of Indian
minerals sector unfolds the following
insight:
 A SWOT Analysis for Indian
Mining
• STRENGTHS
 Rich resource endowment in a wide spectrum of
minerals. The nation’s current inventory in
minerals will be adequate for the sustainable
development of the economy.
 Availability of skilled manpower for mineral
resource development, including managerial,
technical and entrepreneurial skills.
 Large domestic market for resource-based
industrialization.
 A SWOT Analysis for Indian
Mining
 Conducive regulatory environment which
is realistic, transparent and stable for
investment and security of concessions.
 Industry enjoys a competitive
advantage through high geological
prospectivity, reasonable infrastructure
base, and can draw upon a highly skilled
national IT-base for future growth
trajectory.
 A SWOT Analysis for Indian
Mining
WEAKNESSES
 Low technology status and consequent low
productivity undermines the competitiveness of
the minerals sector. Efforts at innovation or
technology upgradation are sorely lacking.
 A SWOT Analysis for Indian
Mining
 Environmental performance of the industry has
invited much criticism and the current liability
for site rehabilitation of past ravages is large
and glaring. The industry is looked upon as an
environmental predator and has attracted much
ire of the civil society.
 Lacking foresight and strategic long-term plans
and failure to showcase the potentials, the
industry has failed to attract much foreign
direct investment.
 A SWOT Analysis for Indian
Mining
 Lack of purposeful and focused research,
design and development initiatives in the
industry.
 Inordinate delays in getting concessions and
environmental clearances contribute to
protracted gestations lags for new industry
projects.
 The minerals sector suffers from an image
crisis and has not been proactive in showcasing
its initiatives in environment and CSR.
 A SWOT Analysis for Indian
Mining
 Logistics and infrastructural
bottlenecks vis-à-vis railways and
port facilities often militate against
export opportunities and imports as
well.
 Value addition through mineral
processing is very low.
 A SWOT Analysis for Indian
Mining
 Indigenous capacity for exploration is very
limited.
 Access to land for exploration and mineral
development is increasingly becoming a serious
constraint and oftentimes the “social licence” is
difficult to garner.
 Lacking a technology vision for the future, the
industry is often reluctant to invest in high
technology. The industry is plagued by a whole
 A SWOT Analysis for Indian
Mining
 host of syndromes like, NIMBY and BANANA.
 For greenfield developments, relief and
rehabilitation packages are not mandated and
often the project affected people feel
alienated.
 Lack of accommodation for sharing resources of
mineral-rich States with neighbouring States
puts roadblocks to investment and development.
 A SWOT Analysis for Indian
Mining
 Absence of change agents in the mineral
industry who could contribute to a paradigm
shift in the affairs of the minerals sector.
 Lack of work ethic and work culture in the
minerals sector which are reflected in
poor productivity levels.
 A SWOT Analysis for Indian
Mining
• OPPORTUNITIES
 India has the potential of emerging as a
leading mineral economy in the world, if the
needed structural reforms are implemented.
 Using its entrepreneurial skills and manpower
resources, the minerals sector could seize the
opportunity of mineral development overseas.
 Sustainable development of the sector could
propel the national economy to great heights.
 A SWOT Analysis for Indian
Mining
• THREATS
 Increasingly strident civil society and judicial
activism could cripple the sector.
 Access to land is a critical and sensitive issue
which hinders mineral development.
 Poor governance, high levels of corruption and
failure to seize opportunities in time could halt
the sustainable development of the sector.
 A SWOT Analysis for Indian
Mining
• Sustainable development of Indian
minerals sector is a key issue for the
nation as mineral resources could generate
substantial wealth and become a powerful
catalyst for economic development. The
National Mineral Policy,2008 marks a
watershed, providing as it does a vision for
steering the future of the sector.
 A SWOT Analysis for Indian
Mining
• Even if sustainable development as
applied to mineral resources is an
oxymoron, finite as mineral resources
are, technology provides the basic
tools to stave off the crisis of a
“mineral famine” through innovative
solutions. This is the road to El
Dorado for Indian mining.