National Mineral Policy 2006 - Department of Mines
National Mineral Policy 2006 - Department of Mines National Mineral Policy 2006 - Department of Mines
Chapter 4Infrastructure Needs and Financing(Term of Reference no. 4)To prioritise the critical infrastructure needs of the Indian mining sector and makerecommendations on ways to facilitate investment to meet these needs4.1 Unlike any other industrial project a mining project cannot be set up at a place of theentrepreneur’s choice. The mine has to be located at the place where the ore body lies. Forpromoting industrial development we have the option of first setting up infrastructure [e.g.industrial estate or Special Export Zone (SEZ)] and then inviting industrial units to establishtherein. In the case of mining, the mine operator first identifies the ore body, then locates thesite where the mine is to be developed, and then builds the infrastructure needed to set up andoperate the mine and evacuate the ore. In other words, the mine does not go to theinfrastructure, the infrastructure has to come to the mine. The infrastructure needs of themining sector can be classified into two categories. First, infrastructure needed to developand operate a mine; and second, infrastructure needed to evacuate the mineral bearing ore tothe processing site or port either as raw ore or as a value added product after the raw ore hasbeen processed at or near the pit mouth. Examples of such value addition are metal-inconcentrate(MIC) in the case of copper and sizing, blending, and pelletising in the case ofiron ore.LINKING INFRASTRUCTURE FOR MINING ACTIVITIES4.2 Infrastructure needed to set up the mine requires access to the mine site by men andmaterial (mining equipment). Infrastructure required to operate the mine includes colonies forhousing people and meeting their needs (social infrastructure) and power andtelecommunications to run the equipment and meet the needs of the habitations. If the minesare not large, such as those in the SME sector, or if the equipment is high-tech and laboursaving, the human resource related infrastructure required may not be very much. However,power is required for carrying out mining operations and further processing activities thathave to be necessarily carried out near or at the mine site. .Infrastructure needed to evacuate94
the ore (raw or processed) is mainly the road and/or railhead from where the mineral is to betransported to the site of the processing unit, e.g. refinery or smelter. If the ore is to beexported, then the infrastructure includes road or rail connection to the port and the port itselfwhere adequate handling and shipping (berthing, loading, draught, etc.) capacity is needed.Other utilities, such as a water source, would be specific to the project. It is, therefore,essential that adequate infrastructure facilities, viz. roads and railways, power, port facilities,and water and other utilities are available to the miner. Without these the resources cannot beaccessed, extracted, and marketed.4.3 Roads and utilities within the mining areas are generally constructed and maintainedby the mining companies themselves, even in the SME sector. Road and rail links for thetransportation of minerals from the mined areas to the nearest railhead, national highway(NH), or state highway (SH) are the primary infrastructure requirement before a mine can beoperated. In the absence of such links the growth potential of the mining sector in the countryis seriously handicapped. The infrastructure issue has to be seen in two different contexts,viz. needs of the mining majors, on the one hand, and the needs of the SME sector mines, onthe other. Mining majors or large-scale stand alone mines tend to construct their own linkinginfrastructure. Publicly funded infrastructure is needed mainly for the SME sector minessince their ability to build linking infrastructure is limited by the scale of their operations.4.4 While in most parts of the world there is not much mining in the SME sector, themining operations in India are largely confined to the SME sector. This is because the Indianlaws and procedures have so far been somewhat biased against large stand alone mines thatrequire concessions over a large area for economies of scale. The Indian large mines aremainly of iron ore, bauxite, copper, zinc, manganese, gold, and limestone (bulks) and aremostly in the captive segment. There are 11 relatively large stand alone iron ore mines (seeAnnexure 11), two copper mines with Hindustan Copper, one zinc mine cluster withHindustan Zinc, one manganese ore mine with Manganese Ore (India) Limited (MOIL), anda gold mine with Hutti Gold. There is no kimberlite (deep) diamond mining in India nor arethere any beach sand mineral (BSM) mines in the large-scale sector. Since mining proper inmost parts of the world is mainly a large-scale non-captive activity the mining world tends toregard India as a country without a developed mining sector. The only exception is dimensionstone (granite, marble) which is an activity both in the large-scale as well as in the SMEsector and is located in coastal areas and is primarily export-driven.95
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Chapter 4Infrastructure Needs and Financing(Term <strong>of</strong> Reference no. 4)To prioritise the critical infrastructure needs <strong>of</strong> the Indian mining sector and makerecommendations on ways to facilitate investment to meet these needs4.1 Unlike any other industrial project a mining project cannot be set up at a place <strong>of</strong> theentrepreneur’s choice. The mine has to be located at the place where the ore body lies. Forpromoting industrial development we have the option <strong>of</strong> first setting up infrastructure [e.g.industrial estate or Special Export Zone (SEZ)] and then inviting industrial units to establishtherein. In the case <strong>of</strong> mining, the mine operator first identifies the ore body, then locates thesite where the mine is to be developed, and then builds the infrastructure needed to set up andoperate the mine and evacuate the ore. In other words, the mine does not go to theinfrastructure, the infrastructure has to come to the mine. The infrastructure needs <strong>of</strong> themining sector can be classified into two categories. First, infrastructure needed to developand operate a mine; and second, infrastructure needed to evacuate the mineral bearing ore tothe processing site or port either as raw ore or as a value added product after the raw ore hasbeen processed at or near the pit mouth. Examples <strong>of</strong> such value addition are metal-inconcentrate(MIC) in the case <strong>of</strong> copper and sizing, blending, and pelletising in the case <strong>of</strong>iron ore.LINKING INFRASTRUCTURE FOR MINING ACTIVITIES4.2 Infrastructure needed to set up the mine requires access to the mine site by men andmaterial (mining equipment). Infrastructure required to operate the mine includes colonies forhousing people and meeting their needs (social infrastructure) and power andtelecommunications to run the equipment and meet the needs <strong>of</strong> the habitations. If the minesare not large, such as those in the SME sector, or if the equipment is high-tech and laboursaving, the human resource related infrastructure required may not be very much. However,power is required for carrying out mining operations and further processing activities thathave to be necessarily carried out near or at the mine site. .Infrastructure needed to evacuate94
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