Mining Sector Records Remarkable Production Growth in FY 2023-24
Context:
The mining sector in India has witnessed notable growth in the production of key minerals and aluminium.
Relevance:
GS-03 (Economy)
Details:
- The index of mineral production for March 2024 reached 156.1, marking a 1.2% increase compared to March 2023.
- Throughout FY 2023-24, the index recorded a substantial growth of 7.5% over FY 2022-23.
- Notable non-fuel minerals that exhibited positive growth in March 2024 include Copper Concentrate, Gold, Manganese Ore, Diamond, Graphite, Kyanite, Sillimanite, Limeshell, Limestone, and Magnesite.
- Iron ore and limestone, which constitute around 80% of the total MCDR mineral production by value, experienced significant growth in production during FY 2023-24.
- Iron ore production reached a record high of 277 million metric tons (MMT).
- Limestone production also achieved a record level of 450 MMT.
- Primary aluminium production witnessed a growth rate of 2.1%, rising from 40.73 lakh tons (LT) in FY 2022-23 to 41.59 LT in FY 2023-24.
Significance:
- India ranks as the 2nd largest aluminium producer, 3rd largest lime producer, and 4th largest iron ore producer globally.
- The robust growth in iron ore and limestone production reflects strong demand conditions in user industries such as steel and cement.
- The increased production of aluminium indicates vibrant economic activity in sectors like energy, infrastructure, construction, automotive, and machinery.
How can mining in India be made more favorable?
- Promoting Domestic Exploration:
- Recognizing the significance of 30 critical minerals for various sectors like renewable energy and electric vehicles.
- Offering incentives such as tax breaks, subsidies, and research grants to encourage domestic exploration.
- Establishing collaborations between government agencies, research institutions, and private companies to facilitate exploration activities.
- Investing in research and development to develop innovative technologies for efficient mineral exploration and extraction.
- Reforming Exploration Models:
- Moving away from the conventional revenue-maximizing approach to a more investment-friendly model.
- Creating a conducive regulatory environment that encourages risk-taking and long-term investment in exploration.
- Providing financial support, including exploration grants and low-interest loans, to attract smaller exploration firms.
- Adopting best practices from successful exploration models in countries like Canada, Australia, and South Africa.
- Encouraging Private Sector Participation:
- Allowing private companies to participate in the mining of critical minerals with significant industrial applications.
- Reviewing existing regulations to facilitate private investment in mineral exploration and extraction.
- Providing transparent and streamlined approval processes for private sector projects to expedite their implementation.
- Facilitating public-private partnerships to leverage the expertise and resources of both sectors for sustainable mineral development.
- Establishing an Independent Regulatory Authority:
- Addressing regulatory uncertainties and inconsistencies by establishing an independent regulatory body.
- Empowering the regulatory authority to oversee the entire mining sector and enforce compliance with environmental and safety standards.
- Ensuring transparency and accountability in regulatory decision-making processes to build trust among stakeholders.
- Collaborating with state governments and industry stakeholders to develop a unified regulatory framework that promotes responsible mining practices and protects the interests of all stakeholders.
