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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                                                                    




Chapter I



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.


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

Statutory Initiatives During 2001-2002

l  Time limits prescribed for decision on applications for mineral concessions

l  Time limits prescribed for approval of mining plans

l  Stringent penal provisions for violations in Mineral Conservation and Development Rules, 1988

l  Off shore Areas Mineral (Development and Regulation) Bill 2001 introduced in Parliament.

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.


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.


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.


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.


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.


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.


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.


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.


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



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


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.


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.



Category                              Total                      SC            ST         OBC        Minority         Women

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

                                               243                      44               8              7                  3                 41

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.


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



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.


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.


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)

Sl. No.



Target for 2001-2002

Achievement 2001-2002 (upto Dec., 2001)




Inspection of Mines






Approval of Mining Plans


No. of Mining Plans













(b) No. of Mining Schemes














Updation of National Mineral

Inventory (NMI) as on 1.4.2000


Finalisation of inventories





(No. of minerals)


Computerisation of updated





inventories (No. of minerals)


Preparation/Updation of Mineral Maps (Hect)




Mineral maps along with forest overlays of soapstone lease-holds in Rajasthan and bauxite leaseholds in Gujarat were in progress. Besides, preparation of mineral maps of sillimanite & limestone leaseholds in Meghalaya State was completed


Ore Dressing Investigations




41 completed and 25 in progress.


Chemical Analysis




37,733 completed and 939 in progress.


Chapter IV



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.



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.


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)

Mineral Total

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.


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.


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.


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.


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.


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:-


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.


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.


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.


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.


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.


A.   Bauxite and Aluminium


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.


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)


                                            (Karnataka: 240,000)

MALCO                     50,000                     Chennai

                                                             (Tamil Nadu)

Table 4.3

Installed Capacity - Aluminium

(Tonnes per annum)

         Company      Installed Capacity

         NALCO         230,000   *

            BALCO            100,000

            HINDALCO       242,000

            INDAL                117,000 **

            MALCO             25,000

         Total               714,000

*   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)





(Upto Dec.2001)

























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.


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)


No. of Factories

Installed Capacity

Production during 2000-01


(a) HCL




(b) Sterlite




(a) Birla








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


Average LME price of Copper (US $ per tonnes)















(Up to Dec 2001)

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.


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)



Hindustan Zinc Limited (HZL)



Binani Industries Limited (BIL)



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


Zinc Metal        Lead Metal

          Demand           Produc-                 Gap          Demand           Produc-                 Gap

                                       tion                                                             tion

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.


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

4.63 It may be recalled that the approved Ninth Plan Outlay (1997-2002) was Rs 7753.96 crore, against which the actual outlay is anticipated to be Rs 4907.24 crore. The proposed Tenth Plan outlay (2002-2007) is Rs 10011.86 crore. A statement on the plan wise financial outlays of the Department of Mines for the Ninth Plan and the Tenth Pl

Plan is given at Annexure VI.

Chapter V



5.1  The Geological Survey of India (GSI) is a subordinate office of the Department of Mines, and is a premier national scientific survey and research organization. It is also the principal resource base of basic earth science information. GSI has recently completed its 150 years of dedicated service to the nation. A series of theme based national seminars of topical interest were held in which scientists from GSI, Central and State Departments, Universities and organizations engaged in earth science studies participated. This led to the exchange of scientific information, dissemination of knowledge and enhancement of public awareness about the contribution of earth science in general and GSI in particular towards various facets of societal development.

5.2  In view of the increasing national demand for geo-information on the state of the environment and natural hazard potential and the post-liberalization scenario in the mineral sector, which has thrown the sector open for domestic as well as foreign direct investment both in exploration as well as exploitation of minerals, it is evident that there is need to take stock of the working of GSI. Consequently the Government is in the process of setting up a High Powered Committee to review the working of GSI. Under the Third United Nations Conference on the Laws of the Sea (III UNCLOS), the outer limit of the Continental Shelf could be extended up to 350 nautical miles depending upon several parameters including the thickness of the sediments of the area. GSI has to carry out bathymetric and magnetic (parametric) surveys for the same. To enhance the capabilities of GSI in the fields of ground, marine & aerial surveys and its laboratories budget provision has been kept in the Tenth plan Outlay for purchase of a sea-going research vessel and up gradation of its laboratory facilities.    

5.3  The current thrust areas of activity of GSI include:

Ø   Creation and updating of national geoscientific information and knowledge base through ground, marine and airborne surveys

Ø   Concept oriented thematic mapping/studies for location of deep seated mineral deposits

Ø   Integrated natural resource surveys and monitoring of environmental degradation,

Ø   Modernization and updating of laboratory facilities.


5.4  During 2001-2002, GSI took up a total of 148 programmes on mineral investigations. GSI has covered 98.23 % of the total area of 32,87,000 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.

5.5  The Marine Wing of the GSI also continued its offshore geo-scientific survey programme within the EEZ of Bay of Bengal, Arabian Sea, Andaman Sea and beyond the EEZ in the Indian Ocean. The details of the survey and exploration done by GSI has been enumerated in Chapter IV.


5.6  In connection with the mineral investigation and evaluation, GSI carried out 667.13 square kilometre of large scale mapping, 29.507 square kilometer of detailed mapping and 70888.63 metres of drilling. The details of the mineral reserves assessed by GSI have been enumerated in Chapter IV.


5.7  Geotechnical

Ø   The GSI provides geo-technical advice to various civil engineering projects of the country, including large number of multipurpose projects dedicated to hydro-electricity generation, flood control and irrigation.

Ø   Some of the important projects include :

      Tehri Dam, Uttaranchal

      Ranjit Sagar Dam (Thein), Punjab

      Naptha Jhakri Project, Himachal Pradesh

      Narmada Sagar Project, MP

      Sardar Sarovar Narmada Dam Project, Gujarat.

Ø   GSI also took up landslide zonation map around Aizawal - Sairong and Serchhip and Chhiatlong towns of Mizoram.

5.8  Environment

Ø   Fifty investigations on environmental studies have been taken up for geoenvironmental appraisal, geoenvironmental impact assessment and studies on natural hazard including public health hazards, flood and drought prone areas.

Ø   GSI studied high fluoride contamination of ground water in around Nasipur-Naihati area , Birbhum district, West Bengal, Yeotmal district of Maharashtra and arsenic contamination of ground water and soil of Rajnandgaon district, Chhattisgarh to identify the source.

5.9 Dovemap

Ø   Under the Development of Village Economy through Mineral Appraisal Project (DOVEMAP), with a view to generate high resolution resource informatics on cadastral map base, geomorphology, geo-environment, soil pattern, land use data, availability of surface and ground water etc. surveys were carried out in 206 villages in Assam, Meghalaya and Tripura states of the North East, and 35 villages in Beed district, Maharashtra.

5.10             Seismotectonic Studies

Ø   An area of about 1.2 million square kilometre was covered for damage surveys in the areas devastated by Bhuj earthquake of 26th January, 2001 by GSI. Fourteen MEQ instruments were deployed in the area. The study of after shocks were conducted up to middle of April 2001. Iso-seismal maps of the area were prepared and detailed interpretation of the data sets is in progress.

Ø   GSI is now manning the Broad band seismic observatory at Jabalpur.

Ø   GSI is actively involved in seismic microzonation studies in Delhi and Bhuj regions.

Ø   During the current year such studies were undertaken in Uttaranchal, Jammu and Kashmir and Madhya Pradesh.

Ø   GSI continued the collection of all types of relevant data for monitoring Himalayan Glaciers.


5.11  GSI accorded high priority to laboratory studies and R&D efforts to back up the extensive fieldwork carried out by the scientists.

5.12  Detailed petrological, petrochemical and other special studies were undertaken for understanding petrogenesis of host rock and economic minerals. Some of the significant achievements are :

Ø   Arsenic - rich phases identified to be iron rich clastic grains like illite, biotite, chlorite etc and also on authigenic siderite concretions.

Ø   Role of micro-organism in concentration of arsenic in ground water is a distinct possibility and is being examined.

Ø   Identificiation and first time reporting of “Shungites” rock from the borehole core samples of meta exhalites/volcano clastics, Dugocha area, Udaipur district which has immense value in defence/industrial applications.

Ø   Identification of native gold within arsenopyrite from the borehole samples of Bhukia area, Banswara district, Rajasthan.

Ø   Extraction of cesium from geothermal fluids at Puga valley is a significant achievement that has generated international interest.

Ø   GSI-ISRO collaborative programme on dynamic fluvio-geomorphological study was also carried out in the upper parts of the Brahmaputra valley between Guwahati- Sadiya sector.

5.13  A new location to the dinosaur study has been added with the recent recovery of fossils of dinosaurs from late Cretaceous Mahadek Formation, in the West Khasi Hills district Meghalaya.

5.14  Over 93,700 samples involving about nine lakh thirty thousand determinations have been analysed in the chemical laboratories of GSI. GSI is also involved in the preparation of Standard Reference Materials of rocks for major, minor and trace elements.


Ø   GSI has launched its own WEBSITE ( ) with relevant information.

Ø   State-wise geological and mineral maps, geological maps of various coalfields, and mineral belt maps of North Eastern Region have been compiled.

Ø   Aeromagnetic image map of part of peninsular India on 1 : 2 million scale, compiled from high altitude aeromagnetic data and data collected by other agencies, has been published as a part of collaboration project with NGRI.

Ø   A total of 37 departmental priced publications including Extended Abstracts highlighting investigation progress have also been released. In addition, 13 un-priced publications including “Story of GSI” was released during inauguration of the 150 year celebration.

Ø   As a part of the 150 year celebration, District Resource Maps (DRM) of 122 districts of the country have been finalized and printed.

Ø   A total of 27 geoinformatic projects have been pursued so far after creating/ developing necessary infrastructure.

Ø   First phase of GSI-ITC collaborative venture - Project : INDIGEO has been completed. It provides necessary technical knowhow and training on Geographical Information System(GIS), image processing, map digitisation etc.


Ø   GSI organised 25 training/refresher/advanced courses in core disciplines and in management involving 438 participants, including 34 trainees from outside organisations.

Ø   The organization celebrated its hundred fiftieth anniversary. A series of national seminars had been held, in which earth scientists from GSI, Central and State Departments, Universities and private organizations engaged in earth science studies participated. These Seminars included the following

       l  “Four decades of Marine Geosciences in India - A Retrospective”, Mangalore (14-16th March, 2001);

       l         “Geotechniques and Geological hazards in the Indian Context”, Shillong (24th - 26th April, 2001);

       l         “Offshore and Ground Mineral Exploration and Environment, Bhopal (16th & 17th May, 2001);

       l         “Exploration and Survey for Noble metals and Precious Stones”, Hyderabad (22nd & 23rd May, 2001); and

       l         “Recent Advances in the Field of Earth Sciences and their implication in National Development”, Nagpur (19th -21st July, 2001).

       l  “Role of Earth Sciences in integrated development and related societal issues”, Lucknow
(2nd - 4th November, 2001)

       l  “ Mineral exploration and Resource Surveys (Base metals, strategic minerals and Rare Earths”, Jaipur ( 19th - 20th December 2001).

       l  “Role of Information Technology in Socioeconomic”, Bhubaneswar (19-20th February, 2002)

Ø   “Geographical Survey of India, - Prospectus and Retrospectus”, Bangalore (26th-28th February, 2002)

Ø   Apart from training, GSI officers participated in national and international seminars held both within the country and outside.


Ø   GSI continued co-operation with international organisations by participating in bilateral and collaborative exchange programmes.

Ø   Out of ten International Geological Correlation Programme(IGCP) projects, three were successfully completed and four more new items have been offered for Indian participation including that of ‘Medieal Geology’.

Ø   Important bilaterial activities with many countries like France (BRGM), South Africa, Myanmar, Netherlands, Australia, Vietnam, China, Nepal etc. are being pursued.

Ø   A collaborative research study on impact of mining activities on water quality of Subarnarekha Basin (Jharkhand, Orissa, West Bengal) was in progress with BRGM, France.


5.18  Geological Survey of India is one of the major contributors in the on going Multidisciplinary and multiorganisational Indian Antarctica activity since its inception.

A two member team from GSI is participating in the XXI Antarctica expedition. The studies will include continuation of glacio-morphological mapping. In addition, monitoring of the fluctuation of polar ice margin and that of the shelf ice surface will be continued and extended to other areas.


5.19  During 2001-2002, till December 2001, GSI has undertaken the following activities in the North Eastern region

Ø   An area of 3556 square kilometre has been photogeologically mapped

Ø   Specialised Thematic Mapping of an area of 480 square kilometer carried out.

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

Ø   Regional geoenvironmental appraisal of Assam on scale 1:2,50,000 completed.

Ø   The geoenvironmental appraisal of Serchhip and Champhai townships in Mizoram, taken up at the request of the govt. of Mizoram.

Ø   Landslide hazard zonation of certain areas in Assam, Meghalaya and Mizoram with special emphasis of site-specific studies taken up.

Ø   Under project DOVEMAP (Development of village economy through mineral appraisal programme), 206 villages were covered.

Ø   Three items of geotechnical evaluation with 24 components (including 8 additional components) were taken up all of which were sponsored programmes.

Ø   Active fault mapping with neotectonic, palaeoseismic and microearthquake studies was carried out in Garo Hills, Meghalaya and adjacent Goalpara district, Assam.

Ø   Two research programmes were continued.

Ø   Compilation of Quadrangle Geological Maps in Arunachal Pradesh, Assam, Manipur, Meghalaya and Nagaland.


5.20  The Table 5.1 gives the employment of personnel in the GSI as on 31.12.2001.

Table 5.1

Employment of Personnel in GSI



Total No. of Employees in position

No. of





Group A






Group B






Group B(NG)







Group C

Group D













5.21  The Indian Bureau of Mines (IBM) is a subordinate organisation under the Department of Mines, Ministry of Coal and Mines. It is engaged in the promotion of conservation of minerals, protection of mines’ environment and scientific development of mineral resources of the country, other than coal, petroleum and natural gas, atomic minerals and minor minerals.

5.22  Towards this end, it performs regulatory functions, namely enforcement of the Mines and Minerals (Development and Regulation) Act 1957, Mineral Conservation and Development Rules 1988, the relevant provisions of the Mineral Concession Rules 1960 and Environmental Protection Act 1986 and Rules made there under. It also undertakes scientific, techno-economic, research oriented studies in various aspects of mining, geological studies, ore beneficiation and environmental studies. IBM also provides Technical Consultancy Services to the mining industry for the geological appraisal of mineral resources, and the preparation of feasibility reports of mining projects, including beneficiation plants. It also prepares mineral maps and a countrywide inventory of mineral resources. IBM also maintains a data bank of mines and minerals and publishes statistical periodicals, and brings out technical publications/monographs.


5.23    The performance of IBM in respect of regulation and conservation measures during the period under review has been indicated at Chapter III.

5.24  The performance of IBM with regard to technical studies, investigations and preparation of mineral inventory/maps etc is indicated in the table 5.2.


5.25  During the year 2001-2002 (up to December, 2001), preparation/updation of mineral maps of soapstone leaseholds in Rajasthan and bauxite leaseholds in Gujarat along with corresponding forest overlays were in progress. Preparation of mineral maps of sillimanite leaseholds and limestone leaseholds in Meghalaya State was completed. Besides, 39 index maps, multi-mineral maps, regional geological maps etc. were digitised.

5.26   The preparation of mineral maps with forest overlays with the help from Forest Survey of India, has been initiated for mineral rich areas of different States. These forest overlay     maps will be supplied to the Department of Mines & Geology of State Governments for speedy processing of forest clearance in the grant and renewal of mining leases.


Table 5. 2

Technical studies and consultancy


Sl. No.



Target for 2000-2001

Achi-evme-nt 2001-2002

2001-2002 (upto Dec., 2001)


Mining, Geological & Other Studies






Studies for updating National Mineral Inventory






Special Integrated Studies




13 studies covering 358 mines were in progress.


Updation of National Mineral Inventory (NMI) as on 1.4.2000.


Finalisation of inventories(No. of minerals)






Computerisation of updated inventories (No. of minerals)






Preparation/Updation of Mineral Maps (Hectare)




Mineral maps along with forest overlays of soapstone lease-holds in Rajasthan and bauxite leaseholds in Gujarat were in progress. Besides, preparation of mineral maps of sillimanite & limestone leaseholds in Meghalaya State was completed.


Ore Dressing Investigations




41 completed and 25 in progress.


Chemical Analyses




37,733 completed and

(No. of radicals)

939 in progress.


Mineralogical Studies




1,884 completed and 46 in progress.


Technical Consultancy assignments






Mining Research including Environmental Studies













5.27  Five-yearly updating of National Mineral Inventory as on 1.4.2000 for 64 minerals was in progress. Computerisation of updated inventories in respect of 27 minerals was completed. Codification of sample deposits on the lines of United Nation Framework Classification(UNFC) was in progress. A market survey report on Granite was under finalisation, and market survey studies on Dimension Stones other than Granite and Chromite were taken up. An annual bulletin on Copper-Lead-Zinc, 1999-2000 issue was released and 2000 -01 issue was under finalisation. Besides, three quarterly reports on End-use metal consumption for Copper-Lead-Zinc for quarters ending March, 2001, June, 2001 and September, 2001 were prepared.


5.28  The assignments completed during the year 2001-2002 (upto December, 2001) include (i) Updation of feasibility report on Dikchu Cu-Zn project with fresh market survey for M/s Sikkim Mining Corporation (ii) Mining plan of Dungri limestone quarry for M/s Industrial Development Corporation of Orissa Ltd. (iii) EIA/EMP of Red Hill and Jaghir Magnesite mines for M/s Burn Standard Co. Ltd (iv) Lease-wise Mining Plans of Red Hill, A.S. Jaghir and Jaghir Main Magnesite mines for M/s Burn Standard Co. Ltd. (v) Preliminary Geological Appraisal of Zinna iron and manganese ore mine for M/s S.Goenka Lime & Chemicals Ltd., and (vi) Annual stock measurement (2000-01) at various collieries of M/s Coal India Ltd. In addition to the assignments already completed, 13 assignments on preparation of mining scheme/preliminary geological appraisal reports were in progress.


5.29  During the period under review, ten assignments viz (i) Monitoring of Environmental data in respect of Kymore Bamangaon and Mehgaon Limestone mines for M/s ACC Ltd., (ii) Rapid EMPs for 13 Silica Sand Mines of Faridabad Group of Mines for M/s Sethi & Others (iii) Rapid EMPs for Bandwari and Mohabatabad Silica Sand mines for M/s P.S. Bainda (iv) Rapid EIA/EMP of Talichem Molle iron ore lease for M/s Sociedade De Fomento Industrial Ltd., (v) Rapid EMP of Dikchu copper mine for M/s. Sikkim Mining Corporation (vi) Blast vibration study at Mainpet Bauxite mine for M/s M.P.State Mining Corporation (vii) Ground vibration study at Red Hill & Jaghir Magnesite mines for M/s Burn Standard Co. Ltd., (viii) Ground vibration study at Belkapahar Wollastonite mine for M/s Wolkem Industries Ltd., (ix) Report on site visit to Rampura-Agucha Lead-Zinc mine of M/s HZL for M/s Indo-Gulf Corporation and (x) Geo-technical investigation at Belkapahar Wollestonite mine for M/s Wolkem Industries Ltd., were completed and reports submitted. Besides, 12 assignments sponsored by the Industry on charge basis are in progress.


Ø   IBM is maintaining a web site ( web site provides the main functions and activities of IBM, services provided in the fields of geology, mining, environment, mineral beneficiation etc. to the mining industry, list of IBM publications along with contact persons and their address, and computerised information on mineral resources, production, exports and imports of minerals and metals.

Ø   The statistical publications released during the year 2001-2002 (up to December, 2001) include Indian Mineral Industry at a Glance, 1998-99 and 1999-2000 combined issue, Statistical Profile of Minerals, 2000-01 issue, and 7 issues (up to June, 2001) of Monthly Statistics of Mineral Production Besides, Indian Mineral Industry at a Glance 2000-01 issue was under printing.

Ø   During the year 2001-2002 (up to December, 2001), Indian Minerals Yearbook (IMYB) 2000 issue, Bulletin on Mining Leases and Prospecting Licences-1999 issue and a half-yearly bulletin on Mineral Information, April-September, 2000 issue were released.

Ø   Under the series “Mineral Facts and Problems” the Monograph on Clay was under printing and updating of Monographs on (i) limestone and dolomite and (ii) chromite was in progress. Besides, three bulletins on (i) Ochre (ii) Slurry Transportation in Indian Mines and (iii) Modernisation of Indian Mines Through a Planned Programme of Replacement of Old Machinery and Equipment, were released.


5.31  The Ministry of Steel had constituted an Expert Committee in the IBM to study the effective supply and demand position of chromite at present and in future. The Committee has submitted the report.

5.32  The Ministry of Steel had engaged a joint team of officers from IBM and Directorate of Mines and Geology, Karnataka to inspect the iron ore mining leases in the 8 ranges of Bellary-Hospet Sector in Karnataka State. IBM has since submitted a report entitled “A Report on Scientific Mining of High Grade Iron Ores for Export from Bellay-Hospet, Karnataka”.

5.33  The Department of Mines had constituted a Committee in the IBM to evolve certain standards and guidelines for mine effluents and other parameters in respect of bauxite, chromite, iron, manganese ore, copper, lead & zinc and limestone-dolomite and the Report is under consideration in the Department.


5.34  IBM imparts training to technical and non-technical officials of IBM and also to persons from mineral industry and other agencies in India and abroad. During the year 2001-2002 (up to December, 2001), 19 training programmes were conducted in which a total of 276 IBM personnel and 160 industry personnel including 3 from North-Eastern States participated.

5.35  The officers of IBM participated and also presented technical papers in various National/ International seminars/symposia organised by various organisations in India. IBM also participated in the International Conference of Metallurgists “COM 2001” held at Toronto, Canada during 26-29 August, 2001.



5.36  The requirement of setting up of an All India data communication system in IBM namely Technical Management Information System (TMIS) through a joint venture Indo- French collaborative project was felt to extend the computer based database system for monitoring the mining activity after the implementation of Mineral Resource Intelligence System (MRIS) database at the IBM Headquarters. More specifically this would meet the needs of the Mines Control and Conservation of Minerals (MCCM) Division which is responsible for the enforcement of conservation, systematic and sustainable development of mineral resources and protection of mine environment. The project proposal was initially discussed in the eleventh meeting of the Indo-French Working Group on Mineral Exploration and Development held in September, 1997. Subsequently, IBM entered into an agreement with BRGM, France on 22 June, 1998 for implementation of this joint venture project with a financial implication of 23.4 million French Franc under the financing terms and conditions defined in the financial protocol signed on 25 January, 1998 between Government of Republic of India and the Government of Republic of France. The project commenced on 9 November, 1998 and was successfully completed in March, 2001. The TMIS Computer Centre at Nagpur was inaugurated in May, 2001.


5.37  The field guidelines for estimation of reserves under the United Nations Frame Work Classification (UNFC) System have been finalised. IBM has formulated amendment to MCDR forms to make the reserve figures consistent with UNFC System, and the same is being circulated to all State Governments to elicit their comments. GSI and MECL have been requested to organise in-house training for their officers to familiarise them about the field guidelines. IBM has also conducted one introductory training on this for its officers.

5.38  The manual work of fixing codes for the reserve/resource figures in the National Mineral Inventory (NMI) as on 1.4.2000 has been commenced and is underway. Meanwhile, in the 15th meeting of the Indo-French Working Group held on 13-14 December, 2001 at New Delhi, it has been decided that BRGM, France will provide expert for guiding IBM officers to develop software for converting the National Mineral Inventory database as on 1.4.2000 into the UNFC System.


5.39   Sub-regional office of IBM at Guwahati continued to undertake inspection of mines/ studies on development of resources of the North-Eastern region. During the period 18 mines were inspected for enforcement of provisions of MCDR, 1988 and for processing and disposal of mining plans.

5.40  IBM has also taken up the following studies which are in progress.

     (a)          Preparation of mineral maps of sillimanite and limestone available in North-Eastern Region.

     (b)  Five technical consultancy assignments on preparation of mining plans & mining schemes and topographic survey.

     (c)          Preparation of Rapid Environmental Management Plans in respect of four mines of Sikkim Mining Corporation.

     (d)          Modernisation of beneficiation plant of Sikkim Mining Corporation to improve performance of the plant.

     (e)         Beneficiation studies on silica sand and clay samples collected from North-Eastern States.

5.41  In addition to the assignments in progress, IBM has completed 2 assignments for M/s Sikkim Mining Corporation, namely (i) updation of feasibility report of Dikchu Cu-Zn project with fresh market survey and (ii) Rapid EMP of Dikchu copper mine, and submitted the reports.

5.42  IBM conducted a training programme for 3 chemists of the Directorate of Mining and Geology, Government of Sikkim on chemical analysis of ores, minerals and ore dressing samples at Modern Mineral Processing Laboratory, IBM Nagpur during 5-17 October, 2001.



5.43  Revenue generated during 2001-2002 (up to December, 2001) from the consultancy work in mining, geology, ore dressing and mining research work, training and through sale of publications etc was Rs 75.12 lakh against an annual target of Rs 1 crore.


5.44  The IBM is organised into four functional divisions, namely, (i) Mines Control and Conservation of Minerals (MCCM) Division, (ii) Ore Dressing and Technical Consultancy Division, (iii) Mineral Economics, Statistics, Research and Publication Division, and (iv) Planning and Co-ordination Division, which also looks after administration and finance.

5.45  IBM has its headquarters at Nagpur and twelve regional offices located at Ajmer, Bangalore, Bhubaneswar, Chennai, Dehradun, Hyderabad, Jabalpur, Kolkata, Margao (Goa), Nagpur, Ranchi and Udaipur and two sub-regional offices at Guwahati and Nellore. The IBM has well equipped ore dressing laboratories and pilot plants at Nagpur, Ajmer and Bangalore.

5.46  Employment position as on 31.12.2001 in IBM is given in Table 5.3.





Total No. of Employees in position

No. of





Group A






Group B






Group B







Group C







Group C







Group D














5.47  The year 2001 was observed as Women Empowerment Year in IBM. A one month training programme on “Stress Management” exclusively for the women employees of IBM was organised by the Training Centre. The Recreation Club celebrated Special Women’s Cultural Week, as part of the Women Empowerment Year. During the week long celebrations various competitions were conducted for the women employees and prizes were distributed to the winners on the final day function.

5.48  As on December, 2001, 20 physically handicapped persons were employed in IBM of which 4 are visually handicapped, one is hearing handicapped and 15 are orthopaedically handicapped. Besides, recruitment action in respect of the posts reserved for one each of orthopaedically handicapped, visually handicapped and hearing handicapped persons, is in progress.

Chapter VI


6.1  The Department of Mines has five public sector undertakings (PSUs) under its administrative control, viz National Aluminium Company Limited (NALCO), Hindustan Zinc Limited (HZL), Hindustan Copper Limited(HCL), Bharat Gold Mines Limited (BGML), all in mining and mineral processing, and Mineral Exploration Corporation Limted (MECL), in mineral exploration. In addition, the Department of Mines held 49 per cent equity in Bharat Aluminium Company Limited (BALCO) and Sikkim Mining Corporation for major part of the year. The performance of these undertakings during 2001-2002 is discussed in the following paragraphs.


6.2  NALCO was incorporated on 7th January, 1981 as a wholly owned Government Company following a major decision of Government of India to exploit a part of the large deposits of bauxite discovered in the East Coast. The Company has its Head Office at Bhubaneswar. The main operating units of the Company are (i) bauxite mine at Panchpatmali, Orissa, (ii) alumina refinery at Damanjodi, Orissa, (iii) smelter plant at Angul, Orissa and (iv) captive power plant(CPP) at Angul, Orissa and (v) port facilities at Vishakhapatnam. The Government of India holds 87.15 per cent equity in NALCO and a decision has been taken to further disinvest 30 per cent of the equity through market route by June 2002.


6.3  The physical performance of the Company during the last three years and 2001-2002 (up to December 2001) is given in Table 6.1.

Table 6.1

Physical Performace of Nalco


Sl. No.





Target for2001-2002

2001-02 Actuals upto31-12-2001

2001-02 Revised Estimate



















Calcined Alumina








Aluminium Cast Metal








Net generated From CPP









Alumina Export








Aluminium Export








Domestic Metal Sale








Total Metal Sale








Power to GRIDCO







FINANCIAL PERFORMANCE                                                                                                                                                            

6.4  The financial performance of the Company during the last three years and 2001-2002 (up to December 2001) is given in Table 6.2.                                                                                                               

Table 6.2

Financial Performace of Nalco


Sl. No.




Target for2001-2002

2001-02 Actual upto December 2001

2001-2002 Revised Estimate









Operating Cost







Interest etc.







Depreciation & Amortization







Net Profit before Tax & dividend







Net Profit after Tax but






before dividend


SALES PERFORMANCE                                                                                                                                                            

6.5  The Sales performance of the Company is given at Table 6.3.                                                                                                               

Table 6.3                                                                                                                 

Sales Performace of Nalco     






Target for2001-2002

Actual upto December 2001

Revised Estimate

Export Sales

(a) Calcined Alumina







(b) Aluminium







Total Export Earning

Rs in crore






Domestic Sales








*   Estimated sale in domestic market from January to March,2002 is 30,687 tonnes (keeping in view revised domestic sales target of 125000 tonnes as approved by the Board).


6.6  NALCO is implementing a number of downstream projects to manufacture value added items like special grade alumina, zeolite, etc.

Special Grade Alumina

6.7  A 26,000 tonnes per annum special grade alumina plant at Damanjodi at a capital cost of Rs 56.78 crore based on technical knowhow obtained from Alumina Technology Associates, USA and consultancy service rendered by Engineers India Limited is expected to be commissioned during March, 2002. The plant is designed to produce a total of 24 grades of special hydrate and alumina. With in-house expertise, NALCO is already in the process of production and test marketing of several grades of special hydrates and alumina products produced from the pilot plant. These special products have been sold to different customers and necessary market development activities for expansion of customer base are also being undertaken.

Zeolite-A Project

6.8  A 10,000 tonnes per annum detergent grade Zeolite (Zeolite-A) Plant at Damanjodi, at a capital cost of Rs 24.10 crore based on technical know-how from Central Salt & Marine Chemical Research Institute (CMCSR), Bhavnagar, licensed through National Research Development Corporation (NRDC), New Delhi and with consultancy services rendered by Engineers India Limited, has been commissioned. The Plant has produced a very small quantity, which is being sent to various customers as samples. After getting feed back from the customers, between 100 and 200 tonnes will be produced for trial sale/laundry of the product. NALCO is also exploring the overseas market .


6.9  NALCO has commissioned the 1st 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. In the first phase of expansion itself, NALCO has already doubled its bauxite production capacity from 24,00,000 tonnes per annum to 48,00,000 tonnes per annum to meet the ultimate requirement of bauxite ore for the expanded refinery capacity. The captive port facilities of the Company at Visakhapatnam which handles bulk import of input materials and export of alumina are being upgraded with additional facilities to deal with the higher volumes of import and export.

6.10  After the 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 envisages 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. By any international standards the brown field expansion of NALCO’s alumina refinery is being achieved at a minimum cost. The lower cost of expansion and substantial internal funding of the capital will result in lower production cost of alumina which has been the hallmark of NALCO in the field of alumina production in the world.

6.11  On the metal segment also, NALCO is on fast track, implementing an expansion project which will enhance the smelting capacity from the current level of 2,30,000 tonnes per annum to 3,45,000 tonnes per annum and captive power plant capacity from 720 MW to 840 MW. This project envisages an investment of Rs 2062 crore and is scheduled to be completed by May, 2002 (except the 8th unit of captive power plant).

6.12  The implementation of expansion of smelter and CPP (7th Unit ) are in full swing. About 98% of the ordering has been completed including all major equipments. It is expected that 60 pots will be commissioned as per project completion schedule of May, 2002.

6.13  In case of 7th unit of CPP, the order for main power house package was delayed by about seven months because of a court case by one of the bidders. The delay was made up by saving the time schedule and now the project is expected to be completed by July, 2002.

6.14  Installation of the 8th unit of CPP of 120 MW at a capital cost of Rs 480 crore with a time schedule of 36 months has been approved and M/s MN Dastur and co. has been approved as the Consultant for this unit. The Main Power House Package has been placed on M/s BHEL on repeat order basis. It is expected that this project will be completed well within schedule.

New Scheme/Diversification

Ø  Takeover of International Aluminium Products Limited (IAPL)

6.15  As a strategic move, in March 2000, NALCO had taken over International Aluminium Products Limited (IAPL), a 100% Export Oriented Unit (EOU), with an estimated project cost of Rs 356 crore. Prior to the takeover, NALCO had 26% equity stake in IAPL. IAPL is a 50,000 tonnes per annum cold rolled product plant which produces product mix such as cast coils, cold rolled sheets and coils for end use in foils, cans, roll forming of other industries. IAPL has since been amalgamated with NALCO with effect from 9.11.2001. After amalgamation, the facilities of IAPL have become known as “Rolled Products unit”, and it has retained its identity as a separate 100% EOU. The rolling mills of the project are expected to be commissioned by March, 2002. Detailed marketing strategies are being formulated to launch the product in the international market.


6.16  NALCO has taken various energy conservation measures in the smelter, CPP, mining and refinery complex and the port facilities. In the smelter, NALCO has used fuel oil additive in heavy fuel oil in bake-oven (trial run) and achieved approximately 9% reduction in fuel oil consumption. The existing cast iron peephole lid cover in bake oven is being replaced with refractory material to prevent heat loss, and air infiltration is in progress to reduce energy, the reciprocating compressors have been replaced by rotary compressors in air conditioners to reduce energy consumption, and energy efficient furnace burners (bloom burners) have been installed in one furnace in cast house on trial.

6.17  In the CPP, an energy saving silica control scheme has been chalked out in consultation with Bharat Heavy Electricals Limited, which will save Rs 49 lakh per boiler per year. Further, the number of cooling pumps, fans and compressors have been optimally reduced for energy conservation. These measures would notionally save Rs 119.04 lakh per annum. One centrifugal air conditioner of 187 KW capacity has been replaced with a new environment friendly VAM of 10 of KW rating. This replacement would notionally save Rs 19.38 lakh per year.

6.18  In the mines and refinery complex, efficient proactive maintenance, optimum control, stringent monitoring of leakages, better operational practices have resulted in reduction in overall specific prime energy consumption by 5.21 %. In the port facilities, ship loading activities have been synchronised at Visakhapatnam to achieve optimal results in saving energy, that is time of loading is reduced by 15% approximately, and accordingly 15% of energy is saved.


6.19  Procurement of computer servers, Thin Clients and Network resources were taken up by all units of NALCO to supplement the Information Technology(IT) resources. sixty four KBPS Leased Data Circuit through BSNL has been commissioned for smelter and CPP units and is likely to be commissioned at the refinery unit in early 2002. Also the ISP service bandwidth with STPI is being expanded from 128 KBPS to 512 KBPS.

Ø   An Intrusion detection system to protect NALCO computing resources from internal and external threats has been implemented during November,2001.

Ø   Mail-messaging and work flow application tools are implemented at smelter and CPP units.

Ø   LAN, using Gigabit Ethernet technology is being finalized for implementation at the alumina refinery.

6.20  Applications using web technology for the purpose of MIS and Intranet applications for NALCO have been developed and will be deployed in early 2002.Besides, implementation of Client server Application packages in finance, establishment, purchase and stores, marketing etc. areas have been taken up at units and Zonal Offices of NALCO. Maintenance module of RAMCO e-application is also under implementation at alumina refinery.


6.21  NALCO is the first central PSU in the country to design, implement and certified to the international Environment Management System (EMS) as per ISO 14001. The implementation of EMS as per ISO 14001 in all the four production units has shown improvement on environmental performance and hence greater acceptability of the products in the domestic as well as international markets. Action has been initiated to implement EMS as per ISO 14001 in the port facilities of NALCO at Visakhapatnam by March, 2002. All the production units of NALCO are operating with valid consent from State Pollution Control Board (SPCB). The units have been handling hazardous wastes with authorisation from SPCB, Orissa.

6.22  More than 6.5 million trees have so far been planted in approximately 3000 hectare of fallow land of all the units of NALCO. This activity has been further extended to nearby villages by adopting joint forest management programmes.


6.23  During the year, a number of Production and Process problems including those related to quality improvements were successfully addressed to .

Ø   Like earlier years, the Special Grade Alumina Pilot Plant facilities were run to its full capacity throughout the year. During the year, 292 tonnes of special grade alumina and 423 tonnes special grade hydrate were sold to the buyers.

Ø   Under the Technology Demonstration Project taken up with Regional Research Laboratory (RRL), Bhopal and Fly Ash Mission, Department of Science and Technology, Government of India, on effect of fly ash on soil fertility and crop yield, 2nd year programme of cropping were successfully accomplished. Results are being analysed for incorporation in the final report.

Ø   A Joint Research Project (JRP) was undertaken with Moscow Institute of Steel and Alloys (MISA) and Romelt Sail India Ltd (RSIL), New Delhi to explore possibilities for extraction of iron on a commercial scale from NALCO’s red mud/desilicated sand using Romelt process developed by MISA, Russia. The project is under active implementation.

Ø   A collaborative R&D project on Mechano-chemical Activation of Bauxite to improve the performance of Bayer process of alumina production and minimise the environmental impact of red mud has been taken up with National Mineral Laboratory, Jamshedpur and the project is progressing satisfactorily.

Ø   A collaborative R&D Project on dispersion pattern and behaviour of valuable trace and rare earth elements in bauxite profile at Panchpatmali deposit and scope of their recovery from rejects of refinery plant (laboratory scale study) has been taken up with RRL, Bhubaneswar.

Ø   Scores of collaborative R&D projects are being taken up with various CSIR laboratories and National Institutes of repute for Process and Product Development related to alumina, aluminium and allied fields.

Ø   A sponsored research project on development of squeeze cast, premium quality, aluminium alloy castings is under implementation at Mechanical Engineering. Department, Indian Institute of Science, Bangalore.

Ø   Detailed studies on effect of use of aluminium fluoride of varying densities on pot operation and its consumption pattern in collaboration with Jawaharlal Nehru Aluminium Research Development & Design Centre (JNARDDC), Nagpur were successfully accomplished.

Ø   In-house R&D activities pertaining to development of technology for coated alumina hydrates, reduction of soda content in alumina hydrate and calcined alumina, production light alumina hydrate, Studies in high-temperature furnace for conversion into alpha alumina and studies on de-colourisation of aluminate liquor through alternate routes continued to remain some of the main areas of R&D activities in the Mining and Reasearch Complex, Damanjodi.

Ø   Effect on anode quality improvement, reduction in anode butt generation, improvement in recovery of cathode rejected blocks, evaluation of effectiveness of low density of aluminium fluoride and development of new types of anode clads have been successfully carried out.


6.24  The industrial relations climate of the Company during the period under report remained challenging for some vital issues like demand for Executives and Non-Executive pay revision, post scenario of ash pond debacle etc. The pay scales for the Executive Cadre were revised in April 2001 and the 4th Long Term Wage Settlement of the non-executives was signed on 5.9.2001. The latter is the agreement between the management and union representative for a cordial and harmonious industrial climate in the organisation.

6.25  The situation of the ash pond debacle in the Angul Sector was handled in a very effective manner. The employees worked in a team dedicatedly to face the crisis and up hold the image of the organisation. Along with necessary compensation to the affected people, repair of the embankment of the broken ash pond was made on a war footing.


6.26  NALCO is an equal opportunities employer, although the representation of women employees is relatively low on account of the mismatch between the nature of job requirement vis-a-vis the availability of technically experienced women candidates.


6.27  The Alumina and Mines units of NALCO are placed in the midst of a predominantly tribal area at Damanjodi. The focus is therefore on the rehabilitation and provision of amenities for 600 families who have been displaced for the establishment of the project. Development of roads, school, college, library, recreation centre, ponds, wells and agricultural land etc have been the hallmark of the developmental works undertaken along with the literacy development programme on the peripheral tribal dominated villages. Besides, direct employment in NALCO Damanjodi Sector has been provided to 487 persons on the basis of one able bodied person from each displaced family and opportunity is provided for the balance for their engagement with contractor.

6.28  Besides the statutory retirement benefits viz. provident fund, group gratuity life assurance scheme, pension etc., NALCO has a contributory scheme for post retirement medical facilities to the superannuated employees and also their spouse.


6.29  The Table 6.4 shows the employment position in NALCO.

Table 6.4

Employment of Personnel in Nalco


Total No. of Employee



Ex-Service men




































PH=Physically Handicapped

LDC= Land Displaced Persons


6.30  NALCO achieved a MOU rating of 4.466 (Average) for its performance in 1998-1999, a MOU rating of 1.420(Excellent) during 1999-2000, and a MOU rating of 1.472 (Excellent) for its performance in 2000-2001.


6.31  NALCO has bagged the ‘Excellent Organisation Gold Award ‘ for ‘Pollution Control and Energy Conservation Methods’ conferred by International Greenland Society, Hyderabad. The award was received in October, 2001. In the month of April 2001, NALCO received the most prestigious ‘Indira Priyadarshini Brikhyamitra Award’ for excellent plantation, afforestation and waste land utilisation. In the past, NALCO had received many more awards including ‘Pollution Control Excellence Award’ for Captive Power Plant conferred by State Pollution Control Board, Orissa.


6.32  Hindustan Zinc Limited (HZL) was incorporated in January 1966 as a public sector company after the take over of the erstwhile Metal Corporation of India Limited, to develop mining and smelting capacities to meet substantially the domestic demand of zinc and lead metals. HZL’s operations are broad based and its activities range from exploration, mining and ore processing to smelting and refining of lead, zinc together with recovery of by-products like silver, cadmium, cobalt, sulphuric acid and copper.

6.33  HZL with its Headquarters at Udaipur operates five lead-zinc Mines ( Zawar Group of mines at Udaipur, Rajpura-Dariba mine in Rajasmand, Rampura Aguchha Mine in Bhilwara, all in Rajasthan, Agnigundala lead mine in Guntur, Andhra Pradesh and Sargipali lead mine in Sundergarh,Orissa) with a total lead-zinc ore production capacity of 3.49 million tonnes per annum. HZL also operates four smelters (Debari Zinc Smelter, Chanderiya Lead Zinc Smelter, both in Rajasthan, Vizag Zinc smelter in Andhra Pradesh and Tundoo Lead smelter in Jharkhand) with combined installed capacity of 169,000 tonnes per annum of zinc and 43,000 tonnes per annum of lead. The Sargipali lead mine and the Maton rock phosphate mine stopped operations in July 2001 and October 2001, respectively. Two of its units viz. Rampura Agucha Mine and and Debari Zinc Smelter have been operating with ISO 9002 accreditation. The Government of India holds 75.92% equity in HZL and has decided to further disinvest 26% of equity.


6.34 The production of lead-zinc ore, concentrate and metals are given in Table 6.5.

Table 6.5

Physical Performance of HZL

(Figures in tonnes)




Target for 2001- 2002

2001- 2002 Actual upto December 2001

2001- 2002 Revised Estimate

Lead-Zinc Ore






Lead-Zinc Concentrate






Zinc Metal






Lead Metal








6.35  The financial performance of the Company is given in Table 6.6.

Table 6.6

Financial Performance of HZL

(Rs in Crore)




Target for 2001- 2002

2001- 2002 Actual upto December2001

2001- 2002 Revised Estimate







Operating Cost












Depreciation and







Net Profit







(Profit before tax)


6.36  Zinc sale for the period April 2001 to December, 2001 was 118,898 tonnes, which was 15% higher than the corresponding period of previous year. Sale of lead metal for the period April 2001 to December, 2001 was 26,077 tonnes.


(i)  Kayar lead-zinc prospect, District Ajmer, Rajasthan

6.37  Based on GSI/MECL exploration data, a scheme involving 16,800 metre of core drilling for detailed exploration of the area was evolved. HZL commenced exploration in June 1999 on its mining lease measuring 4.875 square kilometre near Kayar utilizing in-house resources. A total of 9699.80 metre of drilling up to December, 2001 has been completed.

6.38  In order to comprehend the complex geological behavior and to explore the possibility of additional ore lenses in depth, an integrated geophysical survey comprising Magnetics, TDEM and DHEM/FREM was carried out in April 2001. Based on the results, the ongoing exploration strategy has been re-oriented to test the indicated conductors by few drill holes. The campaign is likely to be completed by last quarter of 2002, and the geological report is expected in the first quarter of 2003.

(ii) Jagpura Gold Prospect, Dist. Banswara, Rajasthan

6.39  Under its diversification plan, HZL acquired prospecting license over 43.10 square kilometer for exploration of gold in Jagpura, (Banswara district) in January 1995. A total of 17881 metre drilling progress has been achieved by HZL in the project. However, the Jagpura resource is uneconomic at the current level of gold price. Consequently it has been decided to suspend exploration till prices of gold improve.

(iii) New Zinc Smelter

6.40  The investment proposal for 100,000 tonnes per annum Greenfield Zinc Smelter at Kapasan, Rajasthan was approved in February 2001. However, any further action on the project has not been taken in view of the decision to further disinvest Government equity in the Company.

(iv) Expansion of Debari & Vizag Zinc Smelter

6.41  Expansion projects of existing smelters at Debari and Vizag with a marginal increase in capacity by 10,000 tonnes per annum and 7000 tonnes per annum respectively have been completed, thereby increasing the total production capacity of zinc to 169,000 tonnes per annum.

(v) Nickel Project (Ni-TPP)

6.42  Nickel Extraction Technology Plant (TPP) of 10 tonnes per day treatment capacity at Regional Research Laboratory, Bhubaneswar as a joint R&D Project between HZL and Council of Scientific and Industrial Research(CSIR), Government of India was commissioned in March 2000. The plant was in operation up to February 2001 to firm up the operation parameters. Results of plant operation were found techno-economically viable, and a tripartite Memorandum of Understanding has been signed by CSIR, HZL and NALCO for transfer of the project from HZL to NALCO.

(vi) 100 MW Power Plant

6.43  An MoU was signed between HZL and Rajasthan State Mines & Minerals Limited, (RSMML) in February, 1997 to set up a 100 MW Power Plant. The Request for Proposal (RFP) document for the power project based on liquid fuel , and including liquid natural gas(LNG) (at a later date when available) has been issued.

(vii) Mansi Wakal Stage-I Project

6.44  The Mansi Wakal Stage-I Project jointly funded by the Government of Rajasthan & HZL has been started. The construction of the dam has been started from August, 2001 with the completion period of 30 months. The work of other related items like water conveyance system and power transmission line has already been taken up to finish the activities simultaneously with the completion of the construction of the dam.


6.45  HZL has adopted various measures as on-going process for energy conservation:

Ø   Load & energy management.

Ø   Measurement & monitoring the consumption of various forms of energy.

Ø   Identifying the opportunities through energy audit and survey at regular intervals.

Ø   Plugging of losses in energy usage.

Ø   Sizing of equipment to achieve minimum energy consumption.

Ø   Optimization of system power factor.

Ø   Process improvement / modifications.

Ø   Promoting use of energy efficient system and equipment.


6.46  Local Area Network has been installed in Head Office at Yashad Bhawan, Udaipur. E-mail facility has been provided over the LAN. Connectivity of HZL intranet to outside world through Internet on dial-up line has been implemented. To build up in-house expertise in application development in client/server environment training on database administration in oracle RDBMS has been provided to system personnel. Action towards implementation of integrated on-line software solutions in major areas are planned to be taken up in a phased manner.


6.47  Pollution prevention and control systems installed at company’s mining and smelting units were operated throughout the year thereby maintaining quality of treated effluent and gases within permissible limits. Construction of an improved secured landfill facility for storage of jarosite waste both at Debari and Vizag Smelters have been taken on hand. In order to improve work environment and reduction of dust emissions in sinter plant at Lead Smelter Tundoo, the company has successfully commissioned a bag filter system at a cost of Rs 60 lakh. Further, in view of acute shortage of water at certain units, the company has been taking number of initiations aimed at conserving water in all its operations by better water management. Every year new saplings are planted, and existing trees being kept well maintained at all the units of the company. Environmental occupational health and safety due diligence review has acknowledged good performance of the HZL units and does not contain any serious non compliance issues.


6.48  The following activities were undertaken for process and product development.

Ø      Developing technology for recovery of metals from polymetallic nodules

A pilot plant has been erected for evaluating the process based on leaching in ammonical media. This plant consists of autoclaves, mixture settlers and facilities for electro-winning of copper, cobalt and nickel. The project is a collaboration among HZL, RRL (Bhubaneshwar) and Engineers India Limited and is under the Department of Ocean Development programme. Beside ammonical process being tested in the pilot plant, HZL is working at the laboratory scale on an alternative route based on acid leaching.

Ø Recovery of Metals From Residues

Work is continuing for recovery of metals from silver refinery plant residue, copper cement leached residue, etc. to ensure that various residues stored for long period of time or utilized and stocks are reduced.     


6.49  The industrial relations scenario in the Company had been peaceful and cordial during the period except (i) a two hour token strike by workmen at Zawar Mines, Rajpura Dariba Mines, Maton Mines, at the smelters at Debari and Chanderiya and the Head Office on the call given by Hindustan Zinc Workers’ Federation against the Central Government policy relating to workers viz. amendment in Industrial Disputes Act, Contract Labour (Regulation and Abolishment) Act, reduction in interest rate in provident fund, small savings, reduction in manpower, etc. and (ii) stoppage of work in the lead smelter at Tundoo involving 36 workers on 20.12.2001, on reluctance for re-deployment consequent upon implementation of VRS.

6.50  The Special Voluntary Retirement Scheme was introduced for the workmen of Sargipali Mines and Maton Mines in July and August, 2001 respectively, and 641 workmen have opted and retired. Further, Voluntary Retirement Scheme was notified for executives and workmen in all units except Rampur-Aguchha mines and Chanderiya Smelter, and a total of 1575 employees have opted and retired in October-November, 2001.


6.51  The Company is an equal opportunities employer. The female employees of the Company are sent for training, both in-house and outside. Participation by female employees in various national fora is also encouraged. To take care of medical facilities of female employees, the Company has lady doctors in its hospitals/dispensaries.


6.52  Various welfare measures including free medical aid, drinking water, school facilities, co-operative/ provision store facilities etc. are being availed by/ extended to the tribals and minorities residing in the adjacent areas of the units.

6.53  To take care of the medical needs of retired employees, a medi-claim policy has
been taken through Unit Trust of India (Senior Citizen Unit Plan) under which the retired employees and their spouses can get medical treatment/hospitalisation charges up to Rs 5.00 lakh.


6.54  The manpower employment in the Company as on 31st December, 2001 was 8357 (including 266 women) out of which 1381 belonged to SC, 919 belonged to ST and 470 were minorities.


6.55  Hindustan Zinc Limited is an MOU signing Company since 1991-92. HZL achieved a MOU rating of ‘Very Good’ for its performance in 1998-1999, a MOU rating of ‘Excellent’ during 1999-2000, and a MOU rating of ‘Excellent’ for its performance in 2000-2001.


6.56  Hindustan Copper Limited (HCL) was incorporated on 9th November,1967, under the Companies Act,1956. The major activities of HCL are mining, beneficiation, smelting, refining and casting of finished copper metal into saleable products. HCL produces primary copper in the form of cathode/wire bar/wire rod. HCL also produces by products in small quantities like gold, silver, sulphuric acid, nickel sulphate, selenium, tellurium. The Company has its Head Office at Kolkata. The main operating units of the Company are (i) Khetri Copper Complex(KCC), Khetri, Rajasthan(ii) Indian Copper Complex (ICC) at Ghatsila, Bihar, (iii) Malanjkhand Copper Project (MCP) , Malanjkhand, Madhya Pradesh, and (iv) Taloja Copper Project(TCP), Taloja, Maharashtra. 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.


6.57      The production of ore, metal in concentrates, refined copper(cathode) and wire rod during the year 1998-99 to 2000-2001 is at Table 6.7.

Table 6.7


Physical Performance of HCL





Target for 2001-02

2001-02 Actual up to Dec2001

Ore Production (Thousand tonnes)





Metal in con- centrates (tonnes)





Refined Copper (Cathode) (Tonnes)





Wirerod (Taloja) (Tonnes)






6.59  The financial performance of the company is at Table 6.8.

Table 6.8

Financial Performance of HCL


(Rs in crore)


Sl. No.




Target for2001-02

2001-02 Actual up to Dec2001















Interest and
















Net Profit/





(Loss) before

Income Tax

and dividend


6.59  The Company achieved a total sale of 41054 tonnes of copper during the year 2000 -2001. The Company is likely to achieve a total sale of around 45000 tonnes of copper during 2001-2002.


6.60  HCL is maintaining an internal energy audit system which monitors the energy consumption. The overall consumption of power has reduced from 3254 lakh KWH in 1998-99 to 2795 lakh KWH in 2000-2001, and overall consumption of fuel has reduced from 37,001 kilo litre in 1998-99 to 35,633 kilolitre in 2000-2001.


6.61  Networking at the corporate office was completed in May, 2001. Post Master software was installed at the Head Office for mail transfer. Networking in some of the units and offices was also taken up and completed during the year. The remaining offices and units will be taken up in a phased manner subsequently. Integrated system design and development is being carried out in a phased manner to standardize the programs and MIS reports in offices/units.


6.62  All the Units of HCL have been provided with effluent treatment facilities and attempts are being made for meeting regulatory norms, set by State Pollution Control Boards. The treated water is recycled for further use in plants. For controlling air pollution, HCL has commissioned double hood system of converters, gas cleaning plants, sulphuric acid plants and tail gas scrubbing plants.


6.63  The Industrial Relations situation in the Company was by and large peaceful. A notice under Section 25 (O) of the Industrial Disputes Act,1947 was sent to the Ministry of Labour, Government of India for seeking permission for the closure of the Rakha Copper Project (RCP) w.e.f. 31.8.2001. There were 701 workmen on the rolls. As a sequel to the closure notice, the recognised trade union and other registered trade unions at RCP started holding gate meetings, dharnas etc. All the employees of RCP, however, availed the Voluntary Retirement Scheme. RCP has ceased to be in operation since July,2001.


6.64  The Company is an equal opportunities employer. The Company maintains creche and special rooms for the women employees. The Company has taken steps to prevent any form of discrimination between employees on the basis of gender. In line with the decision of the Hon’ble Supreme Court, HCL has incorporated a special provision in the Conduct, Discipline and Appeal Rules for the prevention of sexual harassment of women workers at work place and for taking adequate punitive measures against such acts.

6.65  Special training programmes were conducted for SC/ST employees during the period under review to augment the technical skills and expertise of the employees. Vocational training programmes are being conducted for the rural men and women mostly belonging to Scheduled Castes, Scheduled Tribes and OBC under various developmental schemes. Hand gloves made by them are being purchased by the Company and these are used as safety appliances.



6.66  Table 6.9 gives the employment position in the Company as on 31.12.2001.

Table 6.9

Employment of Personnel in HCL


Group of Post

No. of Employees

No.of SC

No.of ST

Group A




Group B




Group C




Group D









6.67  A Non plan loan of Rs140 crore was provided to the company during financial year 2000 - 2001 for separation of surplus employees through VRS. The company released 1954 employees by utilising the amount.


6.68  Hindustan Copper Limited is an MOU signing Company and the rating for 2000-2001 is categorized as “Good”. Rating for the years 1998-1999 and 1999-2000 has been ‘Fair’ and ‘Very Good’ respectively.


6.69  Bharat Gold Mines Limited (BGML) was incorporated as a Public Sector Undertaking on 1st April, 1972. BGML has been incurring losses since its inception except 1979 - 80 and 1980 - 81, when company made marginal profit because of the spurt in the prices of gold. The Company has ceased economic operations since October 2001. As on 31.3.2001, the net loss of the Company was Rs 53.25 crore and cash loss was 1.16 crore.


6.70  When the net worth of the company became negative, despite the efforts made by the Government of India to prevent the same through fiscal measures, BGML was referred to Board for Industrial and Financial Reconstruction (BIFR) in 1992. BIFR having considered the case for eight years and three reports of Operating Agency, passed the final order on 12.6.2000 concluding that it is just, equitable and in public interest to wind up BGML under section 20(1) of Sick Industrial Companies (Special Provisions) Act(SICA), 1985 and forwarded its opinion to High Court of Karnataka on 30.6.2000. The Appellate Authority (AAIFR) upheld the verdict of BIFR on the appeal filed by the employees of BGML vide their order dated 15.11.2000.

6.71  The Company also approached Ministry of Labour, Government of India for its closure under section 25(O) of the Industrial Disputes Act. 1947. Having heard the case on 3.1.2001, Ministry of Labour vide their letter dated 29.1.2001 have granted permission for the closure of the Company under section 25(O) of Industrial Disputes Act, 1947 w.e.f. 1.3.2001.

6.72  The Employees Union filed a number of Writ Petitions in High Court of Karnataka. The Hon’ble Single Judge Bench of High Court of Karnataka pronounced a verdict on 16.3.2001 disallowing the Writ Petition concerning VSS but quashing the Orders dated 12.6.2000 of BIFR, Orders dated 15.11.2000 of AAIFR, and Orders dated 29.1.2001 of the Ministry of Labour, Government of India. An appeal against the orders dated 16.3.2001 of High Court of Karnataka before the Division Bench was filed and stay obtained on the order of the Single Judge Bench. The matter is sub-judice.


6.73    The employees of BGML have not been paid salaries from March 2001 as BGML stands closed with effect from 1.3.2001 under Section 25(O) of the Industrial Disputes Act, 1947 in terms of Ministry of Labour, Government of India order dated 29.1.2001. However, the employees of BGML through one of the interlocutory applications to High Court of Karnataka asked for disbursement of salaries. The Division Bench of Karnataka High Court on 28.5.2001, passed an interim order directing for payment of salary for the month of March, 2001 as a stop gap arrangement on humanitarian grounds. As the undertaking stood closed from 1.3.2001, the order regarding payment of salary for March 2001, was not legally sustainable and based on legal advice in this regard, the same was challenged in the Supreme Court. The Supreme Court in its order dated 27.8.2001 directed that the amount equivalent to one month salary be paid as ad-hoc payment, to be treated as payment of salary or payment of benefits to the employees consequent upon the closure consistently with the final orders to be passed by the High Court. The decision of the Supreme Court has been implemented.


6.74  As on 31-12-2000, the total number of employees in the company was 3873 , out of which 2051 were technical and 1822 were non-technical. When the orders of closure of the Industrial Undertaking BGML under the Industrial Disputes Act, 1947 and that of winding up of the Company BGML under SICA, 1985 were challenged in the High Court of Karnataka by the employees, and stay was obtained from a single judge Bench, a total of 3544 employees had remained on the rolls of the Company.


6.75  The Mineral Exploration Corporation Limited (MECL) was set up on 21.10.1972 under the administrative control of the Department of Mines to undertake detailed systematic mineral exploration and allied works to establish reserves of various minerals/ores in the shortest possible time to curtail the gap between the discovery of a prospect and its eventual exploitation. The corporation has been carrying out these functions by steadily enlarging its volume and scope of activities during the last 29 years and has so far established 108,394 million tonnes of mineral reserves upto December 2001, in different states of the country. The Company’s registered office is at Nagpur, Maharashtra, and zonal Offices are located in Ranchi, Nagpur, Hyderabad, Neyveli and Barmer. To promote the commercial activities, commercial centres also function at Delhi and Kolkata. The Government of India has decided that the disinvestment process in Mineral Exploration Corporation Limited (MECL) will be taken up in 2002-2003.

6.76  MECL is the premier exploration agency in the country. It carries out promotional exploration activities on behalf of the Government of India and also contractual exploration on behalf of other agencies including public and private sector and the state Governments as per contract executed by MECL with them. It has been decided to take up the process of disinvestment of the Company in the year 2002-2003.


6.77    The performance of drilling, mining and the geological reports is at Table 6.10.

Table 6.10

Physical Performance of MECL




Target for2001-02(Revised)

Actual in2001-02(Upto Dec 01)

Drilling (Metres)





Mining (Metres)





Final Geological Reports(Nos.)






6.78  Table 6.11 shows the financial performance of MECL:

Table 6.11

Financial Performance of MECL

(Rs in crore)




Target for2001-02(Revised)

Actual in2001-02(Upto Dec 01)






Operating Cost










Depreciation & amorti- sation





Net profit before income tax & dividend





*     After prior period adjustment, write off etc.


6.79  The details of the survey and exploration done by MECL have been enumerated in Chapter IV. During the year 2001-2002 ( From April 2001 to December 2001), MECL has carried out exploration for copper ore in Singhana blocks of Khetri copper belt, Rajasthan, Pachekhani block, Sikkim and Garhi-Dongri /Shitalpani blocks of Malanjkhand copper belt, Madhya Pradesh, under promotional programme.

Ø Khetri Copper Belt, Rajasthan

In Khetri area, the exploratory drilling and associated geological, survey and analytical work has been carried out by MECL in Singhana Extension block (Phase-I). The geological report of the block was submitted in August 2001. A total of 3.48 million tonnes of ore reserves with 0.89% Cu have been estimated in Singhana Extension block (Phase-I) over a strike length of 900 metres. Work in Singhana Extension block-II has commenced in February 2001, and up to December, 2001 a total drilling of 2147 metres has been completed.

Ø Upper Pachekhani Block, Sikkim

MECL commenced exploration in the block in June 2001. A total of 575.25 meters of drilling has been completed in 5 closed and 1 running borehole up to December 2001.

Ø Malanjkhand Copper Belt, Madhya Pradesh

In Malanjkhand area, MECL has carried out exploration work in Garhi-Dongri block, Kurlu-Ghatee, Pipardhar South & Pipardhar East and Shitalpani blocks during 2001-2002. In Garhi Dongri Block, promising results of gold have been obtained in trenches, which require further probing. In Kurlughatee, Pipardhar South and East, exploration was completed in July 2001, and results at shallow depth were not very promising. Exploration work in Shitalpani is continuing.


6.80  The exploration activities of MECL do not cause any significant pollution. However, as a part of exploration work, MECL is carrying out environmental studies for helping the exploitation agencies to plan measures for possible pollution and environmental Impact Assessment (EIA) in various exploration projects and a report on the same is included in geological reports of the projects. MECL has also taken up “Site Characterisation” studies for selection of suitable and safe places for disposal of hazardous wastes.


6.81  The computerized processing of exploration data of 36 blocks of coal, lignite, copper, bauxite, nickel etc. consisting of online database creation, numerical modelling, geological modelling and variographic modelling for analyzing the directional variability was done. Detailed information such as surface topography, lithology boundaries, infra, mine workings, section line etc. were captured from geological plans, topography, geophysical logs etc. by converting into vector data by using autocad map software. The digital information was synthesized and integrated in the main data base for carrying out the modelling application.

6.82  Preparation of Ground Water Prospects Maps under Rajiv Gandhi National Drinking Water Mission Project awarded by National Remote Sensing Agency, Hyderabad was done for total of 30 maps pertaining to the states of Andhra Pradesh, Madhya Pradesh and Rajasthan. The variables that control the ground water regime such as geology/lithology, geological structures, geomorphology, recharge conditions etc. was interpreted from satellite data. This was integrated with the field data collected on rainfall, water table fluctuation, well yield etc. and composite ground water prospects map was prepared in digital and analog form.

6.83  To keep pace with the modern technology in mineral sector and also to meet future challenges, Arc/Info version 8.0.2, NT was purchased and successfully made operational. Extensive usage of the in house facility available for Image processing work connected with remote sensing projects was done. Further, a comprehensive data of textual and graphical content, digital maps were compiled, synthesized and integrated.


6.84  In order to expand the activities of the company, vigorous marketing efforts were made through competitive biddings and discussions/negotiations, besides entering into MOUs and collaborative programmes with different clients, within India and abroad. The results of these efforts, in brief, are as under :

(a)   A total of 47 offers were submitted up to December 2001.

(b)   A total of 16 work orders valued at Rs 658.46 lakhs, were received from various agencies(up to December 2001).


(c)   Agreement signed with:    

      Ø          National Remote Sensing Agency, Nagpur for digitisation of maps.

      Ø          Uranium Corporation of India Ltd. for mine development work in Khundungri East in Decline Mines at Narwapahar and for 200 m drive and allied work at 2nd level in Khundungri block mine at Narwapahar.

      Ø  Bisra Stone Lime Company (BSLC) for purchase of rejected stone from BSLC mines at Birmitrapur.

      Ø  South Eastern Railway, Chakaradharpur for supply, delivery, stacking & loading of hard stone machine crushed ballast at Biramitrapur depot.

      Ø  WSIL for supply of mineral sand.