GOVERNMENT OF INDIA

Ministry of Coal & Mines

Department of Mines

ANNUAL REPORT

2001-2002

Department of Mines

Web Site Address: http://www.nic.in/mines

other important websites

GSI         —     http://www.gsi.gov.in

IBM         —     http://ibm.nic.in

Nalco    —      http://www.nalcoindia.com

HZL        —     http://www.hzlindia.com

HCL        —     http://www. hindustancopper.com

MECL      —     http://www.meclindia.com

CONTENTS

Chapter I            Highlights of 2001-2002                                                                    

Chapter II           Role and Organization of the Department of Mines                           

Chapter III          Mining Policy, Regulation and Conservation                                    

Chapter IV         Performance of the mining and the mineral sector                          

                         (a) General Performance                                                              

                         (b) Survey and Exploration                                                           

                         (c) Performance of important non-ferrous minerals/metals             

                         (d) Plan Outlay                                                                            

Chapter V           Geological Survey of India and Indian Bureau of Mines                

Chapter VI          Public Sector and Joint Sector Undertakings in

                         mining, mineral processing and exploration                                    

                         (a) National Aluminium Company Limited                                   

                         (b) Hindustan Zinc Limited                                                        

                         (c) Hindustan Copper Limited                                                     

                         (d) Bharat Gold Mines Limited                                                  

                         (e) Mineral Exploration Corporation Limited                                

                         (f) Bharat Aluminium Company Limited                                       

                         (g) Sikkim Mining Corporation                                                    

Chapter VII         Science and Technology                                                            

Chapter VIII        International Co-operation                                                        

Chapter IX          Progressive Use of Hindi                                                           

Chapter X           Welfare Measures                                                                    

Annexures                                           

Chapter I

HIGHLIGHTS OF 2001-2002

MINING POLICY AND FOREIGN INVESTMENT

1.1  The Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act) and rules framed there under were amended in 2000-2001, to make the statutory provisions on par with international best practices, and investor friendly. The policy changes have attracted private investment in exploration of base-metals, noble metals and other scarce minerals. Since 1.1.2001, till 31.1.2002, reconnaissance permits in 67 cases involving an area of more than 83,000 square kilometre have been approved so far, of which 29 reconnaissance permits involving 31 thousand square kilometer were approved in 2001-2002.

1.2  Since February 2000, foreign direct investment (FDI) up to 100 per cent is allowed in the mining and mineral sector through the automatic route, except for diamond and precious stones, for which the limit for automatic approval is 74 per cent foreign equity. During the year 2001-2002, three proposals involving foreign direct investment to the tune of Rs 29 crore were approved through the FIPB (Foreign Investment Promotion Board) route, which takes the total number of FIPB approvals to 70, indicating an expected FDI inflow of Rs 3,963 crore.

FORUM FOR INTERACTION

1.3  A Conference of the State Ministers of Mining and Geology was held on 14.7.2001. Many important issues such as requirement for fixing the time limit for grant of mineral concession, time limit for approval of mining plan, release of reserved mineral bearing areas, provisions for prevention of illegal mining, preparation of mineral maps with forest outlays etc. were discussed.

Box 1.1

1.4  A tripartite meeting of Central Government, State Governments and the investors in the mining sector for discussing redressal of problems being faced by the investors was held in New Delhi on 12.11.2001. Many important issues such as prescribing time limit for grant of mineral concessions, simplification of procedure for grant of permission for airborne geophysical surveys, problems in gaining access to geo-physical data, policy regarding captive mines, restriction on trade policy, environment and forestry related issues were discussed.

1.5  As per the discussions in the Conference of the State Ministers of Mining and Geology held on 14.7.2001 and in the Tripartite Meeting of the Central Government, State Governments and the investors held on 12.11.2001, the Department of Mines has amended Mineral Concession Rules, 1960 and Mineral Conservation and Development Rules, 1988 vide Gazette Notifications dated 11.1.2002.

PERFORMANCE OF MINERAL SECTOR

1.6  The national mineral sector recorded a positive growth (1.07 per cent) during the period April 2001-December 2001, as compared to the corresponding period in 2000-2001.

PUBLIC SECTOR UNDERTAKINGS

1.7  In conformity with Government policy to balance the autonomy of PSUs commensurate with accountability and to set mutually acceptable targets, Memoranda of Understanding(MOU) were signed for 2001-2002 with National Aluminium Company Limited (NALCO), Hindustan Zinc Limited (HZL), Hindustan Copper Limited (HCL) and Mineral Exploration Corporation Limited (MECL). Greater autonomy is expected to result in quicker decision making, enhance efficiency and increase productivity of the MOU signing PSUs.

1.8  NALCO has commissioned the first phase of the expansion of its alumina refinery in June, 2000 which has taken the production capacity of Refinery from 8,00,000 tonnes per annum to 10,50,000 tonnes per annum. The final phase of expansion to the level of 15,75,000 tonnes per annum has been completed during December 2001. After expansion, NALCO becomes the largest alumina producer in Asia with an exportable surplus of one million tonnes per annum after meeting the internal demands of its expanded smelter at Angul. The expansion programme in mines and refinery envisaged an expenditure of Rs 1,665 crore. However, through careful selection of the technologies, optimum use of the available infrastructure and proper splitting of various packages coupled with competitive biddings, NALCO is likely to save around Rs 200 crore on the projected cost of expansion.

1.9  HZL has completed expansion of existing smelters at Debari and Vishakhapatnam on schedule by 10,000 tonnes per annum and 7000 tonnes per annum respectively. The zinc production capacity of the Company now has been augmented from 152,000 tonnes per annum to 169,000 tonnes per annum.

DISINVESTMENT

1.10  In case of Hindustan Zinc Limited (HZL) the Government of India holds 75.92% equity and at present the proposal to further disinvest 26% of equity is being pursued again after the lone bid received has been rejected, as it was below the reserve price.

1.11  In National Aluminium Company Limited (NALCO),the Government of India holds 87.15% equity and the Government of India has taken a decision to further disinvest 30% of NALCO's equity through market route by June 2002.

1.12  The Government of India has decided that the disinvestment process in Mineral Exploration Corporation Limited (MECL) will be taken up in 2002-2003.

1.13  The Government of India has decided to disinvest its total shareholding (98.95%)in Hindustan Copper Limited (HCL) to an interested buyer. Expressions of interest have been invited for engaging an Adviser to assist the Government in the disinvestment process. An Inter-Ministerial Group for disinvestment of HCL has been constituted under the Chairmanship of Secretary, Department of Disinvestment.

INTERNATIONAL CO-OPERATION

1.14  The second meeting of the India-Australia Joint Working Group on Energy and Minerals was held in New Delhi on 23-24 May, 2001. The meeting of the Joint Working Group reviewed the Protocol of the first meeting and also identified new project proposals in the fields of mining, Petroleum and Natural Gas and Non-conventional energy sources and decided to work together to develop the collaborative projects discussed during the meeting.

1.15  The fifteenth meeting of the Indo-French Working Group on Mineral Exploration and Development was held in New Delhi on 13-15 December, 2001. The Working Group meeting reviewed the status of the completed projects, progress of ongoing projects and also identified and prioritised six new projects for future co-operation. Agreements for implementation of two projects which were included in the Financial Protocol between Geological Survey of India and Indian Bureau of Mines on the Indian side and BRGM on the French sides were also signed during the meeting.

1.16  The eighth session of the Indo-Russian Working Group on Ferrous and Non-Ferrous Metallurgy was held in New Delhi on 6th February, 2002. The protocol signed at the conclusion of the Working Group Meeting envisages strengthening co-operation in the ferrous and non-ferrous metallurgical sectors.

1.17  The Ministry of Coal and Mines and the Ministry of Energy and Mines of the Kingdom of Morocco signed a Memorandum of Understanding in the fields of Geology and Mining. The Memorandum of Understanding envisages cooperation in the fields of Geology and Mineral Exploration, particularly in computer processing, advanced laboratory techniques, digital image processing, etc. The Hon’ble Minister of Mines, Energy, Trade, Industry and Commerce of the Kingdom of Morocco visited India and met the Hon'ble Minister of Mines and Hon'ble Minister of State for Mines. During these meetings the visiting dignitary expressed desire for strengthening the bilateral cooperation between the two countries in the minerals sector and also outlined the fields of cartography, training of Moroccan personnel in India and geological mapping as their priority areas for mutual cooperation.

1.18  The forty-sixth annual session of the International Lead and Zinc Study Group (ILZSG) was held in India for the first time from 16th to 18th October 2001. India is founder member of ILZSG, which was formed in 1959 under the UN Charter to provide a forum for inter governmental consultation on international trade in lead and zinc, and related matters.

REGULATION AND CONSERVATION

1.19  During 2001-2002, till December 2001, the Indian Bureau of Mines had taken action under the mining statutes for regulation and conservation of mines as in Table 1.1

Table 1.1

  l    Mining Plans approved         :    481

  l    Mines inspected                    :   1653

  l    Violations pointed out          :    1644

  l    Violations fully rectified     :    613

  l    Updated National
Mineral Inventory                 :   27 Minerals

        as obtaining on 1.4.2000

  l    Area covered in                     :   21000             
Mineral Maps                             hectare.

SURVEY AND EXPLORATION

1.20  Highlights of performance of the Geological Survey of India during 2001-2002 were as follows:

Ø  4583 square kilometer of Specialised Thematic Studies have been undertaken;

Ø  15,347 line km of Multi-sensor surveys were conducted by Twin Otter Aircraft of GSI;

Ø  As many as 206 villages of Assam, Meghalaya and Tripura and 35 villages in Beed district, Maharashtra were studied for resource appraisal (project DOVEMAP).

Mineral Finds

Ø   1239 million tonnes of additional coal resources from MP, Chhattisgarh, Orissa and Maharashtra bringing the total reserve at 213.91 billion tonnes.

Ø   64 million tonnes of lignite in West Coast Lignite field. Total reserve of lignite stands now at 29.45 billion tonnes.

Ø   95 million tonnes of iron ore with an average grade of 60 % Fe in Koira - Pathiriposi deposit, Kendujhar district, Orissa.

Ø   2,23,362 tonnes of gold ore with an average grade of 2.88 ppm at Dugocha main block, Udaipur district, Rajasthan .

Ø   440 million tonnes of probable category of all grades of limestone in Litang river Valley, Jaintia Hills district, Meghalaya.

Ø   Over 23.23 million tonnes of commercial grade clay at Kasargod district, Kerala.

CELEBRATION OF 150 YEARS OF GSI

1.21  GSI celebrated a year long programme to commemorate and celebrate the one hundred and fiftieth anniversary of the organisation. The celebration was inaugurated by the Hon'ble Governor of West Bengal on 4th March, 2001 at Kolkata. A Publication "Story of GSI" was released during the inauguration of 150 year celebration. An international seminar was held at Kolkata on 5th & 6th March, 2001 on "Role of Geological Surveys in the 21st Century". This was followed by a series of national seminars, including at Mangalore, Shillong, Bhopal, Hyderabad, Nagpur, Lucknow and Jaipur.

NATIONAL MINERAL AWARDS

1.22  National Mineral Awards are presented every year to scientists and technologists working in the field of earth sciences for striving towards excellence. National Mineral Awards for 2000 were presented on 27th February 2002 by the Coal and Mines Minister to 29 Geoscientists and technologists for outstanding contribution in the field of Earth Sciences and Mining Technology. The National Mineral Award For Excellence, 2000 was awarded to Padmashri Dr B.P. Radhakrishna. The Prize money was increased from Rs 1 lakh to 3 lakh for The National Mineral Award For Excellence and from Rs 50,000 to Rs 1 lakh for other awards.

Chapter II

ROLE AND ORGANIZATION OF THE
DEPARTMENT OF MINES

ROLE OF THE DEPARTMENT OF MINES

2.1  The Department of Mines is responsible for survey and exploration of all minerals (other than natural gas, petroleum and atomic minerals); for mining and metallurgy of non-ferrous metals like aluminium, copper, zinc, lead, gold nickel etc. and 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 is also responsible for mines and minerals underlying the ocean within the territorial waters or the continental shelf, or the Exclusive Economic Zone and other Maritime Zones of India, for which an appropriate legislation is under consideration of the Parliament.

Box 2.1

LIST OF SUBJECTS ALLOCATED TO THE DEPARTMENT OF MINES

Ø    Legislation for regulation of mines and development of minerals within the territory of India including mines and minerals underlying the ocean within the territorial waters or the continental shelf, or the Exclusive Economic Zone and other Maritime Zones of India as may be specified from time to time by or under any law made by the Parliament.

Ø    Regulation of mines and development of minerals other than coal, lignite and sand for stowing and any minerals declared as prescribed substances for the purposes of the Atomic Energy Act, 1962 (33 of 1962) under the control of the Union as declared by law, including questions concerning regulation and development of minerals in various States and the matter connected therewith or incidental thereto.

Ø    All other metals and minerals not specifically allotted to any other Ministry/Department such as aluminium, zinc, copper, gold, diamond and nickel.

Ø    Planning, development and control of and assistance to all industries dealt with by the Department.

ORGANISATIONAL STRUCTURE

2.2  The Organisational Chart of the Department of Mines is given at Annexure I. Headed by the Secretary, the Department of Mines comprises an Additional Secretary, two Joint Secretaries, and one Joint Secretary and Financial Adviser common for the Ministry of Coal and Mines. These officers are assisted by six Directors, two Deputy Secretaries (one post has been upgraded under in-situ promotion), four Under Secretaries, one Deputy Director (Official language), three Principal Private Secretaries, one Junior Scientific Officer, fifteen Section Officers, Six Private Secretaries, one Assistant Librarian and Information Officer and one Assistant Director (Official Language). Besides this, the Department has a technical wing comprising one Industrial Adviser, one Additional Industrial Adviser and two  Development Officers. The total number of sanctioned posts for the Secretariat of the Department of Mines is 50 Gazetted and 193 Non-Gazetted. As against the sanctioned posts, the personnel employed in the Department of Mines under all categories (Group-wise), including General category/Scheduled Castes(SC)/Scheduled Tribes(ST)/Other backward class (OBC)/ Minority/Women is given at Table 2.1.

TABLE 2.1

EMPLOYMENT OF PERSONNEL IN THE DEPARTMENT OF MINES

Group-A                                     26                         3                 -                -                    -                    3

Group-B Gazetted                     24                         4                 -               1                    -                    5

Non-Gazetted                            49                         5                3               1                    -                  14

Group-C                                     85                       14                4               5                   3                  14

Group-D                                     59                       18                1                -                    -                    5

2.3  In addition, there is a Chief Controller of Accounts assisted by a Pay and Accounts Officer and 36 Non-Gazetted Staff in the Pay and Accounts Office.

SUBORDINATE OFFICES, PUBLIC SECTOR UNDERTAKINGS, JOINT SECTOR UNDERTAKINGS, AND RESEARCH INSTITUTIONS UNDER DEPARTMENT OF MINES

2.4  The Department of Mines has two subordinate offices, and five public sector undertakings under its administrative control. In addition, the Department of Mines held equity shareholding in two undertakings during 2001-2002. There are three research institutions which are also funded by the Department of Mines. The details of these bodies is as follows:

A.  Subordinate Offices

(1)   Geological Survey of India (Head Quarter: Kolkata)

(2)   Indian Bureau of Mines (Head Quarter: Nagpur)

B.  Public Sector Undertakings(PSUs)

There are five PSUs under the Department of Mines in 2001-2002, namely :-

(1)   National Aluminium Company Limited (NALCO), Head Quarter: Bhubaneswar;

(2)    Hindustan Zinc Limited (HZL), Head Quarter: Udaipur;

(3)    Hindustan Copper Limited (HCL), Head Quarter: Kolkata;

(4)    Mineral Exploration Corporation Limited (MECL), Head Quarter: Nagpur;

(5)    Bharat Gold Mines Limited (BGML), Head Quarter: Kolar Gold Fields (Karnataka);

C. Joint Venture Undertakings

There are two Companies in which the Department of Mines held equity shareholding during 2001-2002.

(1)   Bharat Aluminium Company Limited (a Company jointly owned by Sterlite Industries Ltd. and Government of India); and

(2)   Sikkim Mining Corporation (a Company jointly owned by the State Government of Sikkim and the Government of India).

The allocation of business relating to Sikkim Mining Corporation (SMC) has been transferred to the Department of Development of North Eastern Region on 21.12.2001.

D.  Research Institutions

There are three Research Institutions under the Department of Mines, namely:-

(i)   Jawaharlal Nehru Aluminium Research Development and Design Centre, Nagpur;

(ii)  National Institute of Rock Mechnics, Kolar Gold Fields,Karnataka; and

(iii) National Institute of Miners' Health, Kolar Gold Fields, Karnataka.

Chapter III

MINING POLICY, REGULATION AND CONSERVATION

MINING LAW AND POLICY

3.1  The Central Government enjoys the power for regulation of mines and mineral development to the extent to which such regulation and development under the control of the Union is declared by Parliament by law to be expedient in the public interest, as per Entry 54 of List-I of the Seventh Schedule to the Constitution of India. The State Governments on the other hand have been given powers under Entry-23 of List-II for regulation of mines and mineral development subject to the provisions of List-I with respect to regulation and development under the control of the Union. Parliament has enacted the Mines and Minerals(Development & Regulation)Act,1957(MMDR Act,1957) under Entry 54 of List-I to provide for the regulation of mines and development of minerals under control of the Union.

3.2  In pursuance of the basic structural reforms initiated by the Government of India in July, 1991 in fiscal, industrial and trade regimes, the National Mineral Policy was announced in March, 1993. The National Mineral Policy recognised the need for encouraging private investment including foreign direct investment and attracting state-of-the-art technology in the mineral sector. Further, the policy stressed that the Central Government in consultation with the State Governments, shall continue to formulate the legal measures for the regulation of mines and the development of mineral resources to ensure basic uniformity in mineral administration and to ensure that the development of mineral resources keeps pace, and is in consonance with the national policy goals.

3.3  In furtherance of the objective of the National Mineral Policy, the MMDR Act, 1957 has been amended in 1994 and 1999. The Mineral Concession Rules, 1960 (MCR) and the Mineral Conservation and Development Rules 1988 (MCDR), framed under the MMDR Act, 1957 have been also modified. Salient features of the amended mining legislation are as follows:

(i)    There is no restriction on foreign equity holding in mining sector companies registered in India.

(ii)  There is a greater stability on tenure of mineral concessions, since the minimum period of a mining lease is twenty years with a maximum period of thirty years. The period of prospecting license is now three years, with possibility of renewal by a further period of two years.

(iii) Thirteen minerals like iron ore, manganese ore, chrome ore, sulphur, gold, diamond, copper, lead, zinc, molybdenum, tungsten, nickel and platinum group of minerals which were reserved exclusively for public sector exploitation have been thrown open for exploitation by private sector.

(iv)  With the 1999 amendment, a concept of reconnaissance operations as a stage of operation distinct from and prior to actual prospecting operations was introduced. The period of reconnaissance permit is three years. A reconnaissance permit holder enjoys preferential right for grant of prospecting license.

(v)   Area restrictions notified for reconnaissance permit, prospecting license, mining lease have been made applicable state-wise, instead of the country as a whole.

(vi)  In 1994, thirteen minerals were removed from the list of minerals included in the First Schedule to the MMDR Act, 1957. With further amendments in 1999, which deleted the mineral limestone from the First Schedule, only for 10 non fuel and non atomic minerals permission of the Central Government is required for grant of mining lease, prospecting license, and reconnaissance permit. These minerals are asbestos, bauxite, chrome ore, copper ore, gold, iron ore, lead, manganese ore, precious stones and zinc.

(vii) State Governments have been delegated powers to grant mineral concessions even for areas, which are not compact or contiguous.

(viii)   State Governments have been empowered to permit amalgamation of two or more adjoining mining leases.

(ix)  State Governments have been delegated powers to approve mining plans in respect of 29 non-metallic/industrial minerals in case of open cast mines.

3.4  During 2001-2002, MCR, 1960 and MCDR, 1988 have been further amended as follows:

(i)    A time limit of ninety days has been prescribed for the Indian Bureau of Mines and the State Governments to convey decision on the mining plan submitted for approval.

  (ii)           Time limits have been prescribed for conveying a decision on applications for mineral concessions, viz six months for reconnaissance permits, nine months for prospecting licenses and twelve months for mining leases.

(iii) The provisions of penalty under MCDR, 1988 have been made more stringent to ensure systematic and scientific mining. Further, the fee structure for various applications under MCR, 1960 and MCDR, 1988 has also been revised to make these pertinent to the cost of processing the applications.

RESPONSE OF THE INDUSTRY TO THE POLICY MEASURES

3.5  In October 1996, the Department of Mines had issued guidelines to facilitate large area aerial prospecting, in response to which, the entrepreneurs have taken 65 large area prospecting licenses, covering an area of over 90 thousand square kilometer. After the amendment in the MMDR Act, 1957 in 1999, 67 reconnaissance permits covering an area of over 83 thousand square kilometer have been granted till 31.1.2002, of which 29 reconnai-ssance permits for an area of 31 thousand square kilometer were granted during 2001-2002. The states for which reconnaissance permits have been approved are Andhra Pradesh (27), Karnataka (23), Rajasthan (14), Uttar Pradesh (2) and Haryana (1).

3.6  The restriction on foreign equity holding in the mining sector was removed in 1994. Thereafter, till 31.1.2002, the total number of foreign direct investment proposals approved through the Foreign Investment Promotion Board (FIPB) with most of the leading global mining companies evincing interest in India was 70, indicating an expected FDI inflow of Rs 3,963 crore. During 2001-2002, three proposals involving expected FDI inflow of Rs 29 crore were approved.

MINING REGULATION AND CONSERVATION

3.7  The Department of Mines discharges the function of regulation and conservation through the Indian Bureau of Mines (IBM), which is a subordinate office of the Department. These functions include enforcement of the Mines and Minerals (Development and Regulation) Act 1957, Mineral Conservation and Development Rules 1988, and the relevant provisions of the Mineral Concession Rules 1960. It also undertakes scientific, techno-economic, research oriented studies in various aspects of mining, geological studies, ore beneficiation and environmental studies.

3.8  The performance of IBM in respect of regulation and conservation during the period under review is indicated in Table-3.1. In addition, during the year 2001-2002 (up to December, 2001) 1,644 violations of Mineral Conservation and Development Rules (MCDR) 1988 were pointed out in respect of 986 mines and 613 violations were fully rectified. Fifty one prosecutions were launched in various courts. Thirty three cases were decided in favour of IBM and seven cases were compounded. Besides, mining operations were suspended under Rule 13(2) of MCDR 1988 in respect of 9 mines i.e. 4 in Rajasthan, 3 in Karnataka and 2 in Goa States.

3.9  During the year 2001-2002 (up to December, 2001) 481 mining plans were approved and 56 were rejected. Since its inception, IBM had received a cumulative total of 11002 mining plans for approval till December 2001,out of which, 8,736 mining plans were approved, 1,170 were rejected, 854 withdrawn by the parties and 121 were referred back to the parties for modification. Besides , 115 mining plans were under scrutiny with the IBM at various Regional/Zonal offices and 6 mining plans were pending with the Directorate of Mines Safety for comments.

3.10  The inspections/studies for the enforcement of provisions of MCDR, 1988 also include provisions on protection of mines environment. During inspections it is ensured that mine operators are taking due care for removal and utilisation of top soil, storage of over-burden/waste rock, reclamation and rehabilitation of land, precaution against ground vibration, control of ground subsidence, abatement measures against air, water & noise pollution, restoration of flora etc, in addition to other conservation and develop-mental measures. Necessary guidance to mine manage-ments/operators is also given for systematic and scientific development of mines including protection of environment. While approving the mining plans and the schemes of mining, it is ensured that the environment impact assessment studies have been carried out and to that effect, an environmental management plan has been incorporated for its effective implementation.

3.11  After the enforcement of MCDR, 1988, extensive afforestation has been undertaken in the mines. During the year 2001-2002 (up to December, 2001) about 4.25 million trees have been planted in and around mine areas. Thus, so far, 55.4 million trees have been planted with a survival rate of 70 percent.

3.12  Mines Environment and Mineral Conservation (MEMC) Weeks are organized in important mining centres every year through the regional offices of IBM to promote awareness amongst mine owners for minimising environmental pollution. During the year 2001-2002 (up to December, 2001), two such programmes were organised, in which 97 mines participated. The various activities during the MEMC weeks generated enthusiasm, wide publicity and awareness amongst mining community for achieving the better environment and eco-friendly mining.

3.13  In connection with the requirement of scientific mining of iron ore in the Bellary Hospet region of Karnataka, a joint team of officers from IBM and Directorate of Mines and Geology, Karnataka inspected all the 78 iron ore mining leases in 8 ranges of Bellary-Hospet Sector in Karnataka State during 2001-2002, and submitted a report on scientific mining of high grade iron ores for export from Bellary-Hospet, Karnataka to the Ministry of Steel, New Delhi.

3.14  The Department of Mines has got a study done through IBM with involvement of the Central Pollution Control Board and the Industry on standards and guidelines for mine effluents and other parameters required for environmental impact assessment, keeping in view of the specific parameters applicable in different mining areas for bauxite, chromite, iron, manganese, copper, lead and zinc during 2001-2002.

3.15  Applied Mining Research is carried out by IBM on various mining aspects so as to help in systematic development of mines and improvement in productivity in mines through evolution of suitable norms. Industry sponsored assignments on environment and rock mechanics on charge basis are also undertaken. During 2001-2002, ten such assignments have been taken on hand and completed.

Table 3.I

Mining regulation and conservation (UP TO DECEMBER, 2001)

Chapter IV

PERFORMANCE OF THE MINING AND
THE MINERAL SECTOR

GENERAL PERFORMANCE

Mineral Production

4.1  The national mineral sector recorded a positive growth during the period April 2001-December 2001, as compared to the corresponding period in 2000-2001. The Index of Mineral Production (Base 1993-94=100) for the period April 2001-December 2001 for all minerals was higher by 1.07 per cent, primarily on account of a positive growth of 3.22 per cent in the coal and lignite sector which has a weight of 32.46 per cent in the index, and a positive growth of 4.86 per cent in the non-fuel major minerals , which has a weight of 12.3 per cent in the index.

4.2  Based on the overall trend so far, the index of mineral production (base 1993-94=100) for the year 2001-2002 is provisionally expected to be 132.30 as compared to 131.73 for 2000-2001, showing a marginal growth of 0.43 percent.

4.3  The total value of mineral production (excluding atomic minerals) during 2001-2002 is estimated to be Rs 57,041 crore, which shows an increase of 0.41 percent over that of the previous year. During 2001-2002, fuel minerals have accounted for Rs47,495 crore or
83 percent, metallic minerals Rs 3,920 crore or 7 percent and non-metallic minerals (including minor minerals) Rs 5,626 crore or 10 percent of the total value. Information on production of selected minerals from 1997-98 to 2001-2002 is appended as Annexure - II.

Export and Imports

4.4  The value of export of ores and minerals during 1999-2000 was Rs 32,752 crore. Diamond (mostly cut) was the principal item of export during 1999-2000 which accounted for 85 percent, followed by granite with a contribution of 5 percent, iron ore, with contribution of 4 percent and precious and semi-precious stones comprising 2 percent. Marble, chromite and emerald were the other important minerals exported during the year 1999-2000. Data on export of ores and minerals during 1995-96 to 1999-2000 is presented at Annexure III.

4.5  The value of import of ores and minerals during 1999-2000 was Rs 71,878 crore. Petroleum (crude) was the main constituent of mineral imports during 1999-2000, which accounted for 57 percent of the total value of import of ores and minerals followed by diamond (uncut) with 32 percent. Coal, rock phosphate and copper ore and concentrates were the other important minerals imported during 1999-2000. Data on import of ores and minerals during 1995-96 to 1999-2000 is presented at Annexure IV.

4.6  As per provisional estimates for exports and imports of minerals during the period April-September 2001, released by the Directorate General Commercial Intelligence and Statistics, Department of Commerce, exports of ores and minerals(excluding gem stones) were worth US Dollar 539.89 Million(Rs 2543.02 crore). In the same period, imports of minerals (excluding gem stones), was US Dollar 7878.20 million, of which US Dollar 7715.47 million accounted for import of petroleum. Excluding the petroleum imports therefore, imports of mineral (excluding gem stones) were worth US Dollar 162.73 million (Rs 766.50 crore). In addition India imported gems and semiprecious stones worth US Dollar 2191.93 million (Rs 10324.56 crore), and exported gems and jewellery worth US Dollar 3352.93 million (Rs 15793.17 crore).

Price Trend

4.7  The Wholesale Price Index for non-fuel Minerals( Base year 1993-94=100) stood at 120.5 in December 2001, and the corresponding Index for December 2000 was 115.5. The minerals included in the Wholesale Price Index are iron, manganese, bauxite, chromite, limestone, fluorite, gypsum, fireclay, china clay, dolomite, magnesite, asbestos, barites, steatite, silica sand, phosphorite, felspar, ochre, and vermiculite. The Wholesale Price Index for metallic minerals was 122.7 in December 2001, as compared to 122.0 in December 2000, and that for other minerals was 117.0 in December 2001 as compared to 105.2 in December 2000.

SURVEY AND EXPLORATION

INTRODUCTION

4.8  The Department of Mines discharges the function of survey and exploration through the Geological survey of India(GSI), which is a subordinate office of the Department, and the Mineral Exploration Corporation Limited(MECL), which is a Public Sector Undertaking under the administrative control of the Department.

SURVEY AND EXPLORATION UNDERTAKEN BY GSI

Geoscientific Survey Programmes

4.9  GSI has covered 3090 thousand square kilometer (98.23 % ) of the total area of
3287 thousand square kilometer of the country by systematic geological mapping on 1:50,000 scale. An area of 2,63,000 square kilometer has been identified for updating and refining the database generated during systematic geological mapping by applying higher resolution and the emerging concepts to be covered by theme oriented mapping on 1:25,000 scale.

4.10  About 28,538.50 square kilometres of area has been covered by Specialised Thematic Mapping (STM) during the Ninth Plan up to December, 2001 (So, total coverage till date is 78,450.50 square kilometer). Specialised thematic studies have been undertaken with a view to resolving problems related to stratigraphy, structure and tectonics, ore localisation and conceptual modelling on various aspects including crustal evolution and metallogeny. The geological database established during the systematic geological mapping on 1: 50,000 scale requires incorporation of additional parameters, enhancement in quality and quantity of existing parameters and also refinement of the data element/data subsets of database itself. This involves integration of airborne geophysical data, regional gravity data (aero-gravity or ground gravity), geological and geochemical data backed by high precision laboratory data.

4.11  A coverage of 4583 square kilometer by specialised thematic mapping was carried out against a total target of 8721 square kilometer in parts of (i) Sausar Fold Belt in parts of Maharashtra, Madhya Pradesh; (ii) Southern Extension of Jonnagiri schist Belt, Julakolva Schist Belt and adjoining granitoids of Peninsular Gneissic complex, A.P. (iii) Marwar Super group, Rajasthan; (iv) Khuria-Ratanpur metamaphic belt, Bilaspur district, Chhattisgarh, (v) Eastern Ghats Mobile Belt and adjoining areas in parts of Guntur. Prakasham districts, A.P. etc.

4.12  The Twin Otter Airborne Survey System (TOASS) was deployed to acquire aerogeophysical multi-sensor data in (a) Narayanapet-Raichur areas of Andhra Pradesh and Karnataka for the Kimberlitic pipe rocks, (b) Hungund block of Karnataka to trace the extension of schist belt underneath the Deccan Trap and (c ) Jhansi block of Bundelkhand Granitoid Complex in parts of Uttar Pradesh and Madhya Pradesh for possible multi mineral potentiality.

4.13  Since the acquisition and induction of TOASS by GSI in 1986, a total of 2,68,627 line kilometer (lkm) over an area of 1,32,041 square kilometres was covered by multisensor surveys, involving magnetic, spectrometric and electromagnetic (partly) till the end of 2000-2001. Processing of aerogeophysical data is carried out in the Geophysical mapping Centre (GMC) of AMSE for generation of total intensity magnetic maps, electromagnetic contour maps and elemental distribution maps. Processing of multisensor airborne data acquired during the Flying Season(FS) 2000-01 over 30,732 lkm. and preparation of International Geomagnetic Reference File (IGRF) corrected aeromagnetic map of data acquired during FS 1986-87 and 1987-88 using VAX-11/750 are in progress. Betul block magnetic imaging is in the process of finalisation. Conversion of VAX database into personal computer compatible format and copying on compact disks has also been taken up.

4.14  The Marine Wing of GSI continued its offshore geoscientific survey programme within the Exclusive Economic Zone (EEZ) of Bay of Bengal, Arabian Sea, Andaman Sea and beyond the EEZ in the Indian Ocean. The Marine Wing of GSI has mapped, out of 2.015 million square kilometre area of EEZ of India including territorial water zone, 1.938 million square kilometres. Besides mapping, marine studies included identification and assessment of minerals in off-shore areas apart from successfully carrying out sponsored commercial investigation studies. In the light of extension of the EEZ area, another about 1 million square kilometre area will be added within India's jurisdiction which will be taken up for systematic marine surveys in future. The Marine Wing of GSI continued its offshore geoscientific survey programme within the EEZ of Bay of Bengal, Arabian Sea, Andaman Sea and beyond the EEZ in Indian Ocean. Marine surveys were carried out with a deep sea going research vessel R.V. Samudra Manthan, deployed beyond territorial waters and two coastal research vessels viz. R.V. Samudra Kaustubh and R.V. Samudra Saudhikama, deployed within the territorial waters along east and west coasts respectively. The nearshore zones (0-10m depth) were surveyed by deploying small hired mechanised boats utilising portable echosounder.

4.15  About 8565 lkm bathymetric and 4938 lkm magnetic surveys were carried out along with collection of 798 samples in six cruises of R.V. Samudra Manthan. The surveys included geo-chemical scan for hydrocarbons in the Arabian Sea in collaboration with K D Malviya Institute of Petroleum Exploration, Oil and natural gas Commission (ONGC), two cruises on gas hydrates with ONGC, one cruise for micro-manganese nodules around Lakshadweep, parametric survey for ocean thermal energy currents and late Quaternary chronostratigraphy of the seabed of Bay of Bengal, west of Andaman and Nicobar Islands alongwith geochemical scan for hydrocarbons. One joint cruise of R.V. Samudra Manthan and R.V. Samudra Shaudhikama was taken up in Arabian Sea under 'preparation of special chart' programme. One special short cruise was taken up in and around Barren Island with a view to collect specific samples and measure water temperature surrounding the island.

4.16  The performance of GSI is given in Annexure V and is depicted at Plate 4.1.

Mineral Search and Evaluation

4.17 During 2001-2002, GSI took up a total of 148 programmes on mineral investigations as in Table 4.1.

Table 4.1

Mineral Investigations by GSI (2001-02)

Coal/Lignite    35

Non-Ferrous Mineral    25

Strategic & rare minerals    6

Gold   47

Diamond 11

Ferrous Mineral      5

Fertilizer    1

Limestone/Dolomite/Bauxite    5

Other Industrial minerals    7

Dimension Stone    6

4.18  In connection with the mineral investigation and evaluation 667.13 square kilometer of large scale mapping, 29.507 square kilometer of detailed mapping and 70888.63 metre of drilling were carried out till December 2001.

Coal and Lignite

4.19 An additional reserve of 1239 million tonnes of coal and 64 million tonnes of lignite has been assessed from the data generated from regional exploration. The geological reserve of coal of the country has been estimated at 213.91 billion tonnes and of lignite at 29.45 billion tonnes.

Basemetal

4.20  Promising zones of basemetal (Copper, Lead, Zinc) has been intersected in Muariya block, Betul district, MP, Dhani-Basri area, Dausa district and Bethumbi block, Dariba-Bethumbi belt, Rajsamand district, Rajasthan.

Gold Ore

4.21  A total of 2,23,362 tonnes of gold (Au) ore with an average grade of 2.88 ppm Au at 0.5 ppm cut off in Dugocha main block, Udaipur district, Rajasthan (138464 tonnes with average grade of 3.43 ppm Au at 1.0 ppm Au cut off has been assessed. Gold mineralisation has also been encountered in Dona sector, Kurnool district, Andhra Pradesh.

Diamond

4.22  The find of 32 microdiamonds from stream sediment sample collected around Pavagad area, Tumkur district, Karnataka has raised the hopes for striking a good prospect.

Ø   A diamond, weighing 0.029 g (0.15 carat) has been recovered in Wairagarh area, Chandrapur-Garhchiroli districts, Maharashtra.

Ø   Lamproite bodies were located in parts of Krishna, Khammam and Nalgonda districts, AP and in Bargarh district of Orissa.

Platinum Group of Metals (PGM)

4.23  Incidence of PGM was recorded for the first time in Sakoli Fold Belt in Nagpur and Bhandara districts, Maharashtra. Five samples analysed 100-579 ppb Platinum (Pt), 127-412 ppb Palladium (Pd) and 3.4 - 6.2 ppb Iridium (Ir). Scanning has indicated presence of platinum in Kitari West, Kitari North and Parsori West blocks also.

Bauxite

4.24  Detailed mapping continued in Kumbhawade block, and scout drilling has been taken up in the Hamadara block in Ratnagiri dist., Maharashtra. Eleven (11) boreholes were drilled with diamond drill and truck mounted augur drill. Aluminous laterite/bauxite pockets vary in thickness from 1 metre to 5.75 metre. Drilling also showed presence of a peat/lignite/clay horizon below the laterite/bauxite cap.

Iron Ore

4.25  A total of 95 million tonnes of Iron ore with an average grade of 60 % Fe in Koira - Pathiriposi deposit, Kendujhar district, Orissa has been estimated.

Dimension Stone

4.26  Dimension Stone Granite 60,000 cu. m (assuming 10% recovery) of black granite, 5000 cu. m assuming 20% recovery of multi-coloured granite in Kurnool district, Andhra Pradesh has been assessed. Also, 54.58 million cu. m upto ground level and 87.9 million cu. m., up to 10m below the ground level of granite/granite gneiss in Gaya district, Bihar and 1.483 million cu. m of bluish leptynite in eastern Orissa have been estimated.

Clay

4.27  Over 23.23 million tonnes of clay, Kasargod district, Kerala was estimated as being a commercial grade category and useful in textile, paper coating, insecticide, rubber and ceramic industries.

Lime stone

4.28  A tentative reserve of 440.90 million tonnes of Probable category of all grades has been estimated in parts of Litang River Valley, Jaintia Hills district, southern part of Diastong block, east of Litang River Valley, Jaintia Hills district, Meghalaya.

EXPLORATION UNDERTAKEN BY MECL

Ongoing Projects (Up to December 2001)

4.29  MECL continued to give exploration priorities to the energy minerals i.e. coal and lignite. In addition, exploration for copper, gold, molybdenum and deep drilling for Coal Bed Methane (CBM) investigation was also continued.

4.30  The following exploration programmes were continued during 2001-2002

(A)    Promotional Exploration on behalf of Department of Mines

Ø   Copper at Garhi Dongri, Malanjkhand Copper Deposit, Madhya Pradesh.

Ø   Copper at Pachekhani Project, Sikkim.

Ø   Copper at Singhana, Khetri copper belt, Rajasthan.

Ø   Gold at Dona East, Andhra Pradesh

Ø   Gold at Chinmulgund Project, Karnataka.

Ø   Rare Metal project, Beku, West Bengal.

(B)    Exploration for Coal and Lignite on behalf of Department of Coal

Ø   Coal in the command areas of Singareni Collieries Company Ltd. and Coal India Ltd. (SECL & WCL areas)

Ø   Lignite in the States of Tamil Nadu, Rajasthan & Gujarat.

Ø   Exploration of Non-Coal India Limited (CIL) blocks in the States of Madhya Pradesh, Jharkhand, Chattisgarh and Maharashtra.

Review of Major Exploration Programmes

4.31  A brief review of major exploration programmes undertaken by MECL during 2001-2002 is given below:-

Coal

4.32  Major part of exploration activities of MECL continued for coal, on behalf of Ministry of Coal under priority regional exploration programme and Non CIL blocks. A total of 19833 metres of drilling was completed in various non CIL blocks of Chattisgarh, Madhya Pradesh Maharashtra, West Bengal and Andhra Pradesh. Under Priority Regional exploration against an allocation of 41900 metres for the year 2001-2002, achievement was 36,186 metres, till December 2001. Beside, exploratory mining was continued at Bhopalpalli KTK-3 and a total of 665 metres of mining has been completed.

Lignite

4.33  Exploration for lignite on behalf of Ministry of Coal under priority regional exploration programme was continued in the States of Tamil Nadu, Rajasthan and Gujarat. Against 56600 metres of drilling allocated, a total of 46738 metres of drilling representing 83% has been carried out up to December 2001.

Copper

4.34  Detailed exploration for copper at Singhana (Extension) block, Rajasthan was continued, where a total of 1885 metres of drilling has been carried out till December 2001. Exploration at Ghari-Dongri block, Madhya Pradesh was concluded with 205 metres of drilling duirng the year. The geophysical work was in progress in the area to locate copper ore zone in the Sitalpani block. Detailed exploration for copper was commenced at Pachekhani project, Sikkim and a total of 508 metres of drilling has been carried out.

Molybdenum

4.35  Mine sampling work for Molybdenum at Harur (Tamil Nadu) on behalf of Department of Mines was concluded in April 2001 and analytical study is in progress.

Rare Metal

4.36  Pitting, trenching and associated geological work at Beku project, district Purulia, West Bengal were commenced in December 2001, and a total of 123 metres of pitting/trenching has been carried out so far.

Gold

4.37  Promotional Exploration work for gold funded by the Department of Mines was continued at Dona East, Andhra Pradesh and Chinmulgud, Karnataka. A total of 4619 metres of drilling has been completed so far and both the projects are in progress.

Coal Bed Methane (CBM)

4.38  Deep drilling for coal bed methane on behalf of ONGC was concluded, where 3144 metres of slim hole drilling has been carried out. Subsequently, work order for 3 boreholes involving 3600 metres of drilling in Jharia Coal Field has been received and the work recommenced in December 2001 and a total of 1407 metres have been drilled.

4.39  Significant findings based on MECL's endeavour :-

Ø   322 million tonnes of non-coking coal reserves has been established in the State of West Bengal.

Ø   1092 million tonnes of lignite reserves established in the States of Tamil Nadu and Rajasthan.

Ø   3.48 million tonnes of copper ore reserves with 0.89 Cu% was established in Singhana Extension block (Ph-I), dist Jhunjhunu, Rajasthan.

Ø   1.34 million tonnes of diamondiferous conglomerate has been established at Hatupur, Panna diamond field, Madhya Pradesh.

Ø   1.90 million tonnes of gold ore with 3.93% g/t gold has been established at Dona East (Ph-I), district, Kurnool, Andhra Pradesh.

Ø   0.10 million tonnes of molybdenum with 0.08% molybdenum at Vellampatti south block, Tamil Nadu.

PERFORMANCE OF IMPORTANT NON-FERROUS MINERALS/METALS

A.   Bauxite and Aluminium

Bauxite

4.40  India has large resources of high grade bauxite deposits of the order of 3037 million tonnes of which recoverable reserves are placed at 2462 million tonnes as on 1.4.1995. The proved and probable reserves are 1108 million tonnes, placing the country 5th in rank in the world, next only to Australia, Guinea, Brazil and Jamaica. The Life Index of the recoverable bauxite is placed at 211 years. An area of 32,743 hectare was held under mining lease, which is estimated to yield around 7.717 million tonnes of bauxite in 2001-2002, as compared to 7.893 million tonnes in 2000-2001.

4.41  Given the natural resource endowment, growing demand for aluminium and its alloys, economic opportunities and scope for exports, India can produce alumina at internationally competitive prices. While the bauxite reserves in India account for 7.5 % of the world's total deposits, the aluminium capacity is only 3%, indicating the scope and need for new capacities to meet growing internal demand and for sizeable exports on a long-term basis. Demand for aluminium is expected to grow rapidly with increasing use in the construction, power transmission, transport and packaging sectors. The major bauxite mines are at Panchpatmali in Orissa held by NALCO, Durgmanwadi in Maharashtra and Bagru Hill in Jharkhand held by Indian Aluminium Company Limited (INDAL), Udgiri in Maharashtra held by Swati Minerals and Asota Mevasa in Gujarat held by Bombay Minerals Limited, who together account for 56% of total bauxite production in India.

Aluminium

4.42  There are five Companies in the manufacture of alumina/aluminium, viz the National Aluminium Company (NALCO), a public sector undertaking, Bharat Aluminium Company Limted (BALCO) a joint sector under-taking, Hindustan Aluminium Corporation Limited (HINDALCO), Indian Aluminium Company Limited (INDAL), and Madras Aluminium Company Limited (MALCO), all in the private sector. The annual installed capacity for production of alumina and aluminium are in Table 4.2 and Table 4.3

Table 4.2

Installed Capacity - Alumina

(Unit in tonnes)

Company                     Quantity                     Location

NALCO                     15,75,000                     Damanjodi (Orissa)

BALCO                       2,00,000                     Kor(Chattisgrah)

HINDALCO                3,50,000                     Renukoot (U.P.)

INDAL                        3,12,000                     Muri

                                              (Jharkhand: 72,000)

                                             Belgaum

                                            (Karnataka: 240,000)

MALCO                     50,000                     Chennai

                                                             (Tamil Nadu)

Table 4.3

Installed Capacity - Aluminium

(Tonnes per annum)

         Company      Installed Capacity

*   The Government has approved expansion of the capacity of NALCO's aluminium smelter from 230,000 tonnes per annum to 345,000 tonnes per annum and that of the Captive Power Plant from the 720 MW to 840 MW and further expansion up to the capacity of 960 MW has also been approved. Currently, the projects are under implementation by NALCO.

** Hindalco is also expanding the capacity by 100,000 tonnes per annum

4.42  Production of Aluminium by the primary producers in the country during the last three years is given in Table 4.4.

Table 4.4

Production of Aluminium

(In tonnes)

4.44  It is estimated that during 2000-2001, the primary producers of aluminium had exported 1,66,007 tonnes of aluminium and aluminium products, as against 141670 tonnes exported in 1999-2000.

4.45  The major aluminium producers in the world are China, USA and Canada. According to trade estimates, the total world supply of primary aluminium is estimated at around 2.45 million tonnes for the year 2001, as against an estimated consumption of around 2.40 million tonnes. The estimated supply has been estimated to have marginally increased over the level of the year 2000 while consumption is estimated to have declined, accounting for a surplus of around 0.50 million tonnes at the end of the year 2001.

B. COPPER

4.46  India has recoverable reserves of 53.78 million tonnes of copper ore, capable of yielding 5.29 million tonnes of copper metal as estimated on 1.4.1995. The Life Index of the recoverable copper ore is placed at 80 years. The Indian copper ores have low grade and prevent large scale mechanisation in the underground mines due to the nature of the geometry of the ore body (narrow width and flatter inclination). Manufacture of primary copper based on indigenous ores is characterised by high energy consumption because of low scale of operation and minimal automation. Production was about 161,000 tonnes of copper concentrate in 2001-2002, as compared to 164,000 tonnes in 2000-2001.

4.47      At present, the demand for copper minerals for primary copper production is met through two sources i.e. copper ore mined from indigenous mines and imported concentrates. The indigenous mining activity among the primary copper producers is limited to only Hindustan Copper Limited(HCL). The other primary copper producers in the private sector (Birla Copper and Sterlite Industries) import the required mineral in the form of concentrate, and they have copper mines in other countries. HCL also imports some quantity of copper concentrates for its smelter plants to supplement shortfall in indigenous production. The only copper ore mines accounting for primary production of copper during 2001-2002 were the Malanjkhand , Khetri, Kolihan and Surda mines of HCL.

Production and demand for Refined Copper

4.48  The production of refined copper in India has increased considerably since 1998-99 after Private sector manufacturers started production. Production of refined copper in 2000-2001 was 263,145 tonnes as compared to 226,933 tonnes in 1999-2000.

4.49  The details of units of the major players in copper industry and the production during 2000-2001 are given in Table 4.5

4.50  Compared to the usage of copper in developed countries, the per capita consumption of copper in India is rather low at around 0.3 kilogram. However, the growth in consumption in India for the year 2001-2002 is projected to be 8 per cent as against 3 per cent of the world average. India consumed

Table 4.5

Installed Capacity and Production of Copper

(In tonnes)

about 288,145 tonnes of refined copper in 2000-2001, as compared to 281,333 tonnes consumed in 1999-2000.

Price of Copper

4.51  The domestic price of copper is linked to the price prevailing in the London Metal Exchange(LME). The price of copper declined sharply till 1998-99. Thereafter it appreciated and then again started declining and lately has been fluctuating between US$ 1450 and 1500 per tonnes. The year wise average LME price per tonnes of copper is shown in the following table:

Table 4.6

International Price of Copper

4.52  India is a Member of International Copper Study Group (ICSG). According to the Copper Bulletin for January 2002 brought out by ICSG, the total production of copper in the world
was 11,307,500 tonnes in January-October 2001 of which India accounted for 29,300 tonnes. The major producers of copper are United States, Chile, Peru, China, Mexico and Zambia.

4.53  The major consumers of copper are United States, China, Japan, Germany, France and Italy. The developing countries account for over one-third of refined copper consumption and industrialized countries account for 60 per cent. Global industrial demand for refined copper is over 14 million tonnes and compounded annual growth rate for global copper consumption is around 3%. During January-October 2001, world consumption of refined copper was 12,345,400 tonnes of which India accounted for 233,300 tonnes.

C. LEAD AND ZINC

4.54  India has recoverable reserves of lead and zinc deposits of the order of 17.68 million tonnes of ore as on 1.4.1995, accounting for 2.38 million tonnes of lead metal and 9.70 million tonnes of zinc metal. The Life Index of the recoverable ore is placed at 40 years. The area of 8221 hectare were held under mining lease, which are estimated to yield around 48,000 tonnes of lead concentrate and 362,000 tonnes of zinc concentrate in 2001-2002, as compared to 54,000 tonnes of lead concentrate and 365,000 tonnes of zinc concentrate respectively in 2000-2001.

4.55  The present smelting capacity for primary zinc and primary lead metals in the country are 1,99,000 tonnes and 43,000 tonnes per annum respectively. The break-up of these capacities is indicated in Table 4.7.

Table 4.7

Installed Smelting Capacity of Zinc and Lead

(tonnes per annum)

4.56  Besides these units, both zinc and lead are also produced through secondary routes from scrap, dross, residue etc. Most of the secondary producing units, especially in lead, are in the unorganised sector.

4.57  The demand for zinc and lead has grown at an annual rate of approximately 6 per cent and 6.5 per cent respectively, during the Ninth Plan. With the projected high growth of Steel Industry (and demand for galvanization with zinc) and automobile industry (with automotive batteries with lead as major input), the demand for lead and zinc in India is expected to grow rapidly during the Tenth Year Plan period. The per capita annual consumption in India is 200 grams for zinc and 100 grams for lead. This is amongst the lowest in the developing world. The demand for zinc is expected to grow at the rate of 6.5 per cent and for lead at the rate of 6 per cent during the Tenth Plan period. In order to increase domestic availability of recycled lead in an environment friendly manner, Battery (Management and Handling) Rules 2000, had also been brought out under the Environment Protection Act, 1986.

4.58  The table 4.8 indicates the estimated demand and production for zinc and lead during the last three years and projection for 2001-2002.

4.59  India is a member of International Lead and Zinc Study Group (ILZSG). According to the monthly bulletin of the ILZSG for December 2001, total production of lead in the world was 2.52 million tonnes for the period January to

Table 4.8

Demand and Production of Zinc and Lead

(tonnes)

          Demand           Produc-                 Gap          Demand           Produc-                 Gap

1998-99 237000            181958              55042              97500              61918              35582

1999-00 254100            191958              62142           114577              62630              51947

2000-01 269300            201500              67800           121450              61900              59550

2001-02 287600           214000*              73600           129900           64000*              65900

*   Including 15,000 tonnes of Secondary Zinc and 21,000 tonnes of Secondary Lead.

October 2001, of which the share of India was 26,000 tonnes. The largest producer of lead from lead mines is China followed by the United States, Peru, Canada and Sweden. The largest consumer of lead is estimated to be United States followed by China, Germany, United Kingdom and Italy. The refined lead consumption in the period January-October 2001 was 5.30 million tonnes of which India consumed 106,000 tonnes.

4.60  Total production of zinc in the world was 7.56 million tonnes for the period January to October 2001, of which the share of India was 175,000 tonnes. The largest producer of zinc from zinc mines is China followed by the United States, Peru, Canada and Kazakhstan and Ireland. The largest consumer of zinc is estimated to be United States and China followed by Japan, Germany and Republic of Korea. The refined zinc consumption in the period January-October 2001 was 7.34 million tonnes of which India consumed 238,000 tonnes.

D. TENTH FIVE YEAR PLAN

4.61  The Planning Commission had set up a Working Group on mineral exploration and development (other than coal and lignite) in the context of formulation of the Tenth Five Year Plan (2002-2007). The Working Group was enjoined to review the status of survey and exploration and the mining and mineral sectors, estimate growth of the various sectors, suggest measures to meet the growth objectives, and assess and indicate the investment that would be required to meet the growth objectives. The Working Group has finalized its recommendations, and submitted the same for consideration of the Planning Commission.

4.62  The main recommendations of the Working Group are as follows:

(a) Recommendations on survey and exploration

(i)    The study of National Mineral Inventory covering 64 minerals reveals that, out of the known mineral commodities, 40 to 70% reserves are still under "possible" category with an inadequate confidence level and these require further exploration . Detailed exploration for upgrading the known resources should be undertaken during the Tenth Plan as a distinct activity, tailor made to the requirement of industry for which separate provisions are required to be made.

(ii)  A special thrust is also required to be given to the mineral exploration and development activities in North-Eastern region and other far off places in the Himalayas, coastal regions, desert areas and areas covered by vast expanse of Deccan traps, thick alluvium etc.

(iii)    Efforts by national agencies like GSI, MECL and State Governments etc. in survey and mineral exploration is required to be continued.

(b) Recommendations on Mineral Development

(i)   Two additional greenfield export oriented alumina projects are expected to start production during the Tenth Plan. The alumina refining capacity needs to be enhanced by minimum two million tonnes in the Tenth Plan for increasing exports.

(ii)  Current brown field expansions of existing smelters for production of aluminium during the Tenth Plan can sustain the domestic demand up to 2011-2012. These smelters may not have scope for further expansions. Additional primary metal capacity of about 500,000 tonnes has to be planned during the Tenth Plan so that towards 2010 the required metal is available.

(iii)    Recycling industry needs to be encouraged and organised for obtaining secondary metal at a low cost to meet domestic demand.

(iv)   India is a net importer of copper concentrate. As a long-term strategy for increasing the indigenous copper output, it is necessary to identify new economically viable deposits. To achieve this, it is imperative that exploration is to be given its due thrust during the Tenth Plan period. Further, in order to meet the growing domestic demand and additional exports, there has to be additional smelting capacity based on imported concentrates and scrap.

(v)    Improvement in recoveries of indigenous smelters to the international standards is necessary if they are to remain internationally competitive.

(vi)   With the existing resource position and projected growth in zinc smelting capacities, there will be no problem with availability of zinc ore up to the Twelfth Five Year Plan period. However, in the case of lead, there will be a shortage of lead ore much earlier. There is therefore an urgent need to augment the resource position in the country. An added thrust has to be given for exploration for zinc and lead, in collaboration with reputed foreign mining companies, so as to find new economically viable deposits.

(vii) Power tariffs are required to be brought down to the international level for ensuring that the zinc produced in the country is competitive in the international market.

(viii)   Recycling of zinc scraps using eco-friendly and energy saving technology may be promoted.Further, Research and Development efforts are required to be intensified for recovery of the associated metals and value additons from available indigenous sources.

(c)      Recommendations on fiscal policy, research and infrastructure

(i)   There is a scope for improvement in the mineral taxation regime including accelerated rate of depreciation on mining plant and equipment, amortisation of all pre-production expenses, allowing earmarking of book profits for mine reclamation etc measures, which would be beneficial and contribute to better growth of the mining sector. Also, the tariff structure of railway freights need to be evaluated afresh.

(ii ) The low grade ores available in the country particularly for base metals, noble metals and strategic metals/minerals deserve consideration for suitable commercial utilisation. It is essential that indigenous research and development efforts continue for technology development for beneficiation of these resources, extraction of valuable metals from rejects and waste dumps and their subsequent value addition.

(iii) Keeping in view the likely growth of mineral sector particularly the export potential, the essential infrastructure needs are of great significance. The development of high quality roads connecting the mines to loading stations would be necessary and the State Governments should earmark revenues from royalty for such development.

(iv)  Port facilities are required to be improved by further enhancing the loading rate and improving the turn round time. Also, planned development for internal waterways transportation is to be implemented urgently. Appropriate steps to expedite the commencement of the power projects along with other infrastructure projects would also be beneficial to the mineral sector.

(v)   Financing of critical gaps in ports-rail-road infrastructure may be considered through a special purpose vehicle .

Plan Outlay