In order to excavate the iron ore deposits with least environmental degradation & least deforestation, the best

Mining Industry alternative is by Underground mining.

1

Mining is the extraction of valuable minerals or other

geological materials from the earth, usually from an ore body, vein or (coal) seam. Materials recovered by mining include base metals, precious metals, iron, uranium, coal, diamonds, limestone, oil shale, rock salt and potash. Any material that cannot be grown through agricultural processes, or created artificially in a laboratory or factory, is usually mined. Mining in a wider sense comprises extraction of any non-renewable resource (e.g., petroleum, natural gas, or even water).

 Mining Industry in India started its journey long back in 1774, when the East

India Company permitted an English Company to undertake mining activity in the coalfield in Ranigang.
Gold mining in Kolar Goldfields was started by M/s John Taylor & Sons Ltd in

1880.

It was in the year 1866 that the first oil well in India was drilled in Digboi.

Despite having such a glorious past, the Mining industry in India continued to

be primitive in nature till the beginning of the current century

It was only after independence that the mining sector in India experienced a phenomenal increase in growth rate.

In total there are 84 minerals being produced in India including 4 fuel, 11 metallic, 49 non-metallic industrial and 20 minor minerals.
The products of Indian mining sector consist of coal, lignite, limestone, iron ore, bauxite, copper, lead, zinc and many more contributed by over 3100 mines located all over the country. Productions from open cast mines account for more than 80 percent of the total mineral production in the country. Indian mining industry provides employment to over 1.1 million people with 16 percent share in India's export Indian mining sector contributes just three per cent to the countrys total GDP

The report on metals and mining pointed out that India has immense natural resources and is ranked among top 10 globally for deposits in iron ore at 25.2 billion tonne, coal 257.4 billion tonne and bauxite 3.3 billion tonne, which constitute 3%, 10%, and 4% respectively of the world's resources. The ongoing bull run in minerals has created enormous wealth for investors. Market cap of the leading global mining companies has increased at a Compound Annual Growth Rate of 39% per annum from calendar year 2001 to 2007, while the corresponding figure for top Indian miners is a whopping 139% per annum

The total value of mineral production (excluding atomic minerals) during the year 200708 is estimated at Rs. 99,533.10 crore which shows an increase of about 9.0 percent over that of the previous year.

During the year 2007-08 provisional value of fuel minerals would account for Rs. 68,229.40 crore (69 percent of the total value), metallic minerals Rs. 19,755.66 crore (20 percent of the total value) and non-metallic minerals (including minor minerals) Rs. 11,548.04 crore (11 percent of the total value).

Exports The provisional value of export of ores and minerals during the year 2006-07 was Rs. 80,912 crore. Diamond (mostly cut) was the principal item of export during 2006-07, which accounted for 59.2 percent, followed by iron ore with a contribution of 21.8 percent, granite with a contribution of 5.8 percent, alumina with a contribution of 2.3 percent, precious & semi precious stones with a contribution of 1.0 percent and chromite with a contribution of 0.98 percent. Building and monumental stones, emerald, coal (including lignite), marble and bauxite were the other important minerals exported during the year 2006-07.

Under Ground Mines (Sub Surface Mining)

1. Sub Surface Mining consists of digging tunnels or shafts into the earth to reach buried ore deposits. Ore, for processing, and waste rock, for disposal, are brought to the surface through the tunnels and shafts.

Under Ground Mines

2. Open Cast Mines

Surface mining is a type of Mining in which soil and rock

overlying the mineral deposit are removed. It is the opposite of Underground Mining, in which the overlying rock is left in place, and the mineral removed through shafts or tunnels.
Surface mining is used when deposits of commercially useful

minerals or rocks are found near the surface; that is, where the overburden (surface material covering the valuable deposit) is relatively thin or the material of interest is structurally unsuitable for tunneling (as would usually be the case for sand, cinder and gravel).

Open Cast Mines

Open-pit mine near Garzweiler,Germany

Mining Companies in India

NCDC - National Coal Development Corporation of India
NMDC - National Mineral Development Corporation of India BALCO - Bharat Aluminium Company PPCL - Pyrites, Phosphates and Chemicals Ltd. HZL - Hindustan Zinc Ltd.

NLCL - Neyveli Lignite Corporation Limited

HCL - Hindustan Copper Ltd. BGML - Bharat Gold Mines ltd. SAIL - Steel Authority of India Limited (formerly it was Hindustan Steel Ltd.)

Exploration and Production of Coal / Lignite : Coal India Ltd, Neyveli Lignite Corporation, IISCO etc. Exploration of Metals (Copper, Bauxite, Iron Ore, Chromite, Lead - Zinc) : NALCO, BALCO, Mineral Exploration Corporation Ltd, Bharat Gold Mines Ltd, ONGC, Ircon, Hindustan Zinc Ltd, Hindustan Copper Ltd, Sikkim Mining Corporation. Iron Ore Sector : National Mineral Development Corporation, Kudremukh Iron Ore company, Steel Authority of India Ltd, Orissa Mining Corporation. Bauxite Mining and Aluminium Production : National Aluminium Company. Copper - Ore Mining : Hindustan Copper Ltd. Rock - Phosphate and Barytes Mining : Rajasthan State Mines and Minerals Ltd, Andhra Pradesh Mining Development Corporation.

India is leading producer of mica blocks and mica splitting Third largest Chromites producer in the world Third in production of coal, lignite and barites Fourth largest iron ore producer Sixth largest bauxite and manganese ore producer Tenth position in Aluminium Eleventh position in crude steel production in the world

World Diamond Market

Global diamond production in 2007 was down just 0.6% in value terms at $12.1 billion Volume wise, total production fell 4% to 16.82 crore carat, while value per carat rose 5%

to $71.98 a carat. The Rs.700-billion ($14 billion) diamond cutting and polishing industry in India employs some 700,000 people. Diamond industry of the Indian market is mainly involved with cutting, polishing and exporting diamonds. Diamonds cut and polished in India are universally prized, and India has emerged as the largest diamond-cutting center in the world. Mumbai, Surat, Ahmedabad, Bhavnagar and many small towns in Gujarat are the main polishing centres of the country. The industry employs one million people, accounting for 95 per cent of the workforce of the world`s diamond industry.

Coming to Iron Ore..

Worldwide, 50 countries produce iron ore, but 96% of this ore is produced by only 15 of those countries. Iron ore is the raw material used to make pig iron, which is one of the main raw materials to make steel

It is estimated that worldwide there are 800 billion tons of iron ore resources, containing more than 230 billion tons of iron
The human body is 0.006% iron, the majority of which is in the blood. Blood cells rich in iron carry oxygen from the lungs to all parts of the body. Lack of iron also lowers a persons resistance to infection.

Estimated iron ore production in million metric tons for 2006 according to U.S. Geological Survey
Country China Brazil Australia India Russia Ukraine United States South Africa Canada Sweden Venezuela Iran Kazakhstan Mauritania
Other countries Total world

Production 520 300 270 150 105 73 54 40 33 24 20 20 15 11 43 1690

Company CVRD Group Rio Tinto Group BHP Billiton Group Mittal Arcelor Privat Intertrading Metalloinvest Metinvest Holding Anshan Iron & Steel Evrazholding Cleveland Cliffs LKAB CVG Group Anglo American Imidro Group CSN Group

World's Largest Iron Ore Producers, early 2008 Capacity Base mt/yr Brazil UK Australia UK Ukraine Russia Ukraine China Russia USA Sweden Venezuela South Africa Iran Brazil
China India USA Kazakhstan

323.8 209.3 151.6 74.6 46.0 44.1 38.6 37.0 36.5 34.8 32.0 30.7 30.6 29.4 27.6 25.5 24.6 20.7 19.4

Shougang Beijing Group NMDC Group US Steel ENRC - Eurasian Natural Resources Severstal

Russia

17.3

Iron Ore Production (2006-07)

Organization / State
NMDC SAIL

Million Tonnes
27 25

TISCO
Goa Orissa, Karnataka, Jharkhand Total

08
40 72 172
21

Per Capita Steel Consumption

Country India China World Average Kgs 35 350 150

22

Consumption Pattern of Iron Ore

Domestic Consumption Exports

45% 55%

23

CONTRIBUTION OF THE PUBLIC SECTOR

The public sector contributes over 85 percent of the total value of mineral production. However, it is the avowed policy of the Government to withdraw from the non-strategic sectors and accordingly the public sector undertakings are being privatised in a phased manner. Public sector enterprises like the National Mineral Development Corporation, Kudremukh Iron Ore company, Steel Authority of India Limited and Orissa Mining Corporation dominate the iron ore sector. National Aluminium Company contributes about 35% bauxite mining and aluminium production. Hindustan Copper Limited predominates the copper ore mining sector. After cessation of economic operations in Bharat Gold Mines Limited since 2000, Hutti Gold Mines Limited (a Government of Karnataka undertaking), is the only undertaking engaged in the mining of gold. Rajasthan State Mines and Minerals Limited and Andhra Pradesh Mining Development Corporation predominate the mining of rock phosphate and barytes respectively.

Coal Mining is predominantly a public sector activity - Coal India Ltd. (CIL) accounts for 85% of total coal production

Transworld Garnet Co., Canada Meridian Peak Resources Corpn, Canada Pebble creek Resources Ltd., Canada

BHP Billiton, Australia

Rio-Tinto Minerals Development Ltd., UK Metdist Group, UK Phelps Dodge Exploration Corpn, USA De-Beers Consolidated Mines Ltd., South Africa Anglo American Exploration (India) BV, Netherlands

 World's largest producer of mica blocs and splittings. Ranks third among global chromite producers. Ranks third in the production of coal, lignite, barytes. Ranks fourth in the production of iron -ore. Ranks sixth in the production of bauxite and manganese ore. Ranks tenth in the production of aluminium.

Ranks eleventh in the production of crude steel.

Favourable climate for the rapid development of the mineral industry. Heritage in mining and mineral processing. Potential of large deposits of minerals.

Petroleum: Bombay High Field, Gujarat and Assam Coal: Tamil Nadu, Chhatisgarh, Maharashtra, Orissa, West Bengal and Andhra Pradesh Iron Ore: Andhra Pradesh, Bihar, Goa, Karnataka, Madhya Pradesh, Maharashtra, Orissa, Rajasthan etc. Diamonds: Panna Mines in Madhya Pradesh, Andhra Pradesh and Orissa Gold & silver: Kolar fields in Karnataka, Dona block in Andhra Pradesh, Bansawar district Rajasthan and Madhya Pradesh. Bauxite: Orissa, Andhra Pradesh, Madhya Pradesh, Gujarat, Maharashtra, and Bihar Chromite: Byrapur, Karnataka, Boula, Kathpal, and Orissa Copper Ore: Madhya Pradesh, Rajasthan, Bihar and Sikkim Granite: Andhra Pradesh, Bihar, Gujarat, Karnataka, Kerala, Madhya Pradesh, Maharashtra, Meghalaya, Orissa, Rajasthan, Tamil Nadu, Uttar Pradesh etc. Lead and Zinc Ore: Rajasthan, Andhra Pradesh, Bihar, Gujarat, Maharashtra, Sikkim, Tamil Nadu, Uttar Pradesh Manganese Ore: Madhya Pradesh, Goa, Maharashtra, Andhra Pradesh, Bihar, Gujarat, West Bengal and Karnataka

SWOT
Strengths:

1. The government offers a wide range of concessions to investors in India, engaged in mining activity. The main concessions include, inter alia:
* Mining in specified backward districts is eligible for a complete tax holiday for a period of 5 years from commencement of production and a 30 percent tax holiday for 5 years thereafter. Environment protection equipment, pollution control equipment, energy saving equipment and certain other equipment eligible for 100 percent depreciation. * One tenth of the expenditure on prospecting or extracting or production of certain minerals during five years ending with the first year of commercial production is allowed as a deduction from the total income. * Export profits from specified minerals and ores are eligible for certain concessions under the Income tax Act.

Minerals in their finished form exempt from excise duty. * Low customs duty on capital equipment used for minerals; on nickel, tin, pig iron, unwrought aluminium. * Capital goods imported for mining under EPCG scheme qualify for concessional customs duty subject to certain export obligation. 2.World's largest producer of mica; third largest producer of coal and lignite & barytes; ranks among the top producers of iron ore, bauxite, manganese ore and aluminium. 3. Labours easily available 4. Low labour and conversion costs 5. Large quantity of high quality reserves 6. Exports iron-ore to China and Japan on a large scale 7. Strategic location : Proximity to the developed European markets and fast-developing Asian markets for export of Steel, Aluminium

Weakness:
Coal mining in India is associated with poor employee productivity. The output per miner per annum in India varies from 150 to 2,650 tonnes compared to an average of around 12,000 tonnes in the U.S. and Australia; Historically, opencast mining has been favored over underground mining. This has led to land degradation, environmental pollution and reduced quality of coal as it tends to get mixed with other matter; India has still not been able to develop a comprehensive solution to deal with the fly ash generated at coal power stations through use of Indian coal. Clean coal technologies, such as Integrated Gasification Combined Cycle, where the coal is converted to gas, are available, but these are expensive and need modification to suit Indian coal specifications. Poor infrastructure facilities Mining technology is outdated Low innovation capabilities Labour force is highly un-skilled and inexperienced High rate of accidents Lack of R&D programs and training and development Most of the Indian mining companies do not have access to Indian capital market

Weakness contd.
There is limited access to capital, and mines are increasingly more costly to find, acquire, develop and produce.

There are long lead times on production decisions.

The Indian mining industry suffers from an out-dated, unattractive approach to mining education that is partly to blame for insufficient human resources. Improvement in operational efficiency of the mining companies - Mining companies are in need of an organizational transformation to gradually align its operating costs to international standards. Mining costs of Indian companies are at least 35 percent higher than those of leading coal exporting countries such as Australia, Indonesia, and South Africa. To match productivity, they will need to invest in new technologies, improve processes in planning and execution of projects, and institutionalize a comprehensive risk management framework. Mining operations are not environment friendly. Least importance is given to environment concerns. High rate of illegal mining

The Opportunities

India has an estimated 85 billion tonnes of mineral reserves remaining to be exploited. Besides coal, oil and gas reserves, the mineral inventory in India includes 13,000 deposits/ prospects of 61 non-fuel minerals. Expenditure outlay on mining is a meager sum when compared to other competing emerging mining markets and the investment gap is most likely to be covered by the private sector. India welcomes joint ventures between foreign and domestic partners to mobilise finances and technology and secure access to global markets. Potential areas for exploration ventures include gold, diamond, copper, lead, zinc, nickel, cobalt, molybdenum, lithium, tin, tungsten, silver, platinum group of metals and other rare metals, chromite and manganese ore, and fertiliser minerals. The main opportunities in the mining sector (excluding coal and industrial minerals) are in the development and production of surplus commodities such as iron ore and bauxite, mica, potash, few low-grade ores, mining of small gold deposits, development of placer gold resources located on the frontal belt of the Himalayas, mining known deposits of economic and marginal categories such as base metals in Bihar and Rajasthan and exploitation of laterite for nickels in Orissa, molybdenum in Tamil Nadu and tin in Haryana.

Opportunity contd.

Considerable potential exists for setting up manufacturing units for value added products.

There exists considerable opportunities for future discoveries of sub-surface deposits with the application of modern techniques.
Current economic mining practices are generally limited to depths of 300 meters and 25 percent of the reserves of the country are beyond this depth Strengthening of logistics in coal distribution - In India, the logistics infrastructure such as ports and railways are overburdened and costly and act as bottlenecks in development of free market. Privatization of ports may bring the needed efficiencies and capacities. In addition, capacity addition by the Indian Railways is necessary to increase freight capacity from the coal producing regions to demand centers in the northern and central parts of the country. On the Indian rail network, freight trains get a lower priority than passenger trains, a problem that promotes delays and inefficiency. Special freight corridors would raise speeds, cut costs, and increase the system's reliability.

Opportunity contd.
Focusing on technology for future - India's numerous technology research institutes are working on energy related R&D. However, there is a possibility that they are operating in a fragmented fashion. The Government may get improved recoveries on its investment by concentrating on few important technology areas. To start with focus may be applied for tighter emission standards and development of inexpensive clean-coal technologies viz. extraction of methane from coal deposits. Estimated 82 billion tonnes of reserves of various metals yet to be tapped While India has 7.5% of the world's total bauxite deposits, aluminium production capacity is only 3% of world capacity, indicating the scope and need for new capacities

Threats: 1.Foreign Investment in the Mining Sector:

During 1999, the Government had cleared 7 more proposals of leading international mining companies for prospecting and exploration in the mineral sector to the tune of US$ 62.5 million. 65 licenses have been issued till date for prospecting an area of around 90,142 sqkms in the states of Rajasthan, Maharashtra, Gujarat, Bihar, Haryana and Madhya Pradesh. Prospecting licenses have been granted in favour of Indian subsidiaries of well-known mining companies. These include BHP Minerals, CRA Exploration supported by Rio Tinto (RTZ-CRA), Phelps Dodge of USA, Metmin Finance and Holding supported by Metdist Group of Companies UK, Meridien Minerals of Canada, RBW Mineral Industries supported by White Tiger Resources of Australia, etc. 2.Large integrated international metal manufacturers including POSCO, Mittal Steel and Alcan have announced plans for expansion in India 3.Mining companies and equipment suppliers are under the constant threat of being taken over by foreign companies. 4.A heavy tax burden discourages further investment. 5.Politicians undervalue the industry's contributions to the economy.

6.Stricter environment rules restricting mining activities

FUTURE OF THE SECTOR Mining is an important part of every economy. In a world that is already facing shortages of some of the important minerals and metals like petroleum and coal, the demand for such products is only bound to increase with time. Meeting those demands will be a challenge for the mining and minerals industry worldwide. With the increasing efforts in R&D and technological innovations, the mining and minerals industry has developed huge Human resource requirements. There is already a shortage of skilled workforce throughout the world. Developments are taking place rapidly and many companies in this sector are expanding their operations and are working on new projects like the refinery being constructed by Reliance Industries Limited in Jamnagar. Also Bharat Petroleum is conducting R&D for value added products and alternate fuels. So to conclude, it can be said that mining and minerals sector has a bright future, be it in terms of employment or technology.

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