Producing 95 major and minor
minerals, including four fuel and three atomic minerals, the mining
sector is an important segment of India's economy but needs more
government focus to increase its contribution to the GDP, mining
industry body FIMI said.
India is yet to assess its true
potential of its resources, leading to the country heavily importing
major minerals, to the tune of seven times its domestic production, as
per the Federation of Indian Mineral Industries (FIMI).
know that India is rich in minerals, but have we really assessed by how
much? The risk factor in exploration is very high. You don't find
minerals in every effort you make. Normally the success rate of
exploration is 1:100. As such, no country spends tax payers money in
this risky venture," said FIMI Secretary General R.K. Sharma.
said that the international practice by resource-rich countries is to
entrust the job to junior exploration companies, formed by a group of
geologists with domain expertise in a particular mineral or group of
minerals and operating with venture capital or hedge funds.
a junior exploration company becomes successful in locating a
world-class discovery, it sells this to a major mining company at a
price which would recover all the past losses, if any, and may cover
possible future losses, Sharma added.
A major mining company can
also undertake exploration, he said, citing the case of Rio Tinto which
discovered the world-class diamond deposit in Madhya Pradesh's Bunder.
termed it unfortunate that India's mineral resources remain
under-explored since "exploration activities are restricted to the
government sector and there is virtually no involvement of private
Many international companies like Rio Tinto, Anglo
American, De Beers, BHP (formerly BHP Billiton) among others had shown
interest in exploring India's mineral wealth, but had to call off their
ventures and leave due to "complicated licensing and approval
processes", he said.
On the Bunder mines, he said: "When NMDC
(National Mineral Development Corporation) produces about 45,000 carats
of diamonds in a year, Rio Tinto, with its access to most modern global
technology and expertise, would have produced about 3 million carats of
diamonds in the very first year and this could have gone to 5 million in
subsequent 2-3 years."
Lamenting the squandered opportunity for
wealth and job creation, Sharma said: "Policies need to be simpler and
conducive and only then mining companies can give you desired results."
experts believe that India does not have that world-class technology
for exploration, he said that this is why it is not able to assess its
true mineral wealth potential and FIMI is trying to get the government
to change its policies.
"FIMI has approached the government and
is advocating to engage with junior exploration companies from across
the world who have domain expertise and latest global technologies.
These companies would give you clearer picture of mineral wealth in a
very short span of time. There would be many takers from within India
and across the world who would be then willing to invest in India's
mining sector," Sharma said.
He also said the identification of
potential mining sites would make things easier for the mining companies
to produce within India, and the country will be able to reduce its
import bill and also create massive employment opportunities.
needs to produce that every mineral and metal that the country is
importing. Why spend tax-payers money, when the country has the
potential resources," Sharma said.
"As most of the mines are
located in rural and tribal areas, rural employment will get a boost
besides giving impetus to the local area development," he added.
is also advocating allocation of mines on First-come-First serve (FCFS)
basis as most of the resource-rich countries have adopted this system,
as well as recognition of prospecting and mining as an independent
activity with transferability of the concessions.