INDIA Trends and Developments Contributed by: Anuja Tiwari, Mallika Anand, Aditya Pandey and Aman Raj, AZB & Partners
Overview of India’s Mining Industry India has one of the most diverse landscapes and topography, and has mineral resources in abundance. The Indian mining sector contrib - utes about 2.5% to the nation’s GDP and creates millions of direct and indirect jobs. It is an essen - tial sector for reducing India’s fiscal deficit, and is critical for the socio-economic growth of the country. The Indian mining industry comprises mostly small-scaled operations, with a total of 1,426 operational mines. Notably, the private sector plays a significant role in the industry, contributing 60% of the industry’s overall rev - enue. Status of minerals India has a diverse array of approximately 95 mineral deposits, and the country ranks amongst the top ten global producers of bauxite, iron ore, manganese ore, aluminium and zinc. Other than conventional minerals, India is making strides in the mining of critical and strategic minerals like lithium, cobalt and rare earth elements, which are pivotal for global energy transitions. In 2023, the Indian government announced lithium reserves of 5.9 million metric tons in Jammu and Kashmir, a component crucial to achieve net-zero goals. Past challenges Despite abundant resources, India has failed to scale its mining industry to its maximum poten - tial, and still relies on imports of minerals such as manganese, copper ore and phosphorite. In 2023, India imported 90.31 metric tons of coal from Indonesia, primarily to meet the electricity demand of the country. The industry is also often criticised for its adverse environmental impact and poor safety for workers. The lack of growth in the Indian mining industry is attributable to a variety of factors, as follows.
Regulatory framework The process for auctioning new mines and renewing existing mining leases is lengthy, due to bureaucratic inefficiencies and delays in obtaining environmental clearances, which is a pre-condition for the implementation of a min - ing project. Mining and ore beneficiation also requires prior approvals from the pollution con - trol authorities of the respective states. Entities in the mining sector are currently required to obtain multiple permits, such as licences and environmental clearances from different gov - ernment bodies for each activity throughout the value chain. The government has recently made some major reforms in this aspect, the impact of which is still to be assessed. One key amendment is the removal of dual compliance of obtaining environment clearance and consent to establish, which should reduce the compliance burden on the entity undertaking mining activity. Environmental and social concerns The mining sector across the globe is perceived to be a major contributor to environmental deg - radation. In India, the social and environmental impacts of mining are often ignored as mining operations are undertaken by predominantly small-sized entities. Critical minerals such as coal, mica and bauxite are found in traditional dwellings of tribal com - munities, which has resulted in the displacement of and disruption to these communities. The remoteness and inaccessibility of tribal areas poses a challenge to the enforcement of envi - ronmental laws and reduces the deterrence on mining companies for non-compliance. In previous audits by government authorities, the pollutants emitted by most mines were found to be beyond the prescribed limits. Coal mining in
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