National Mineral Policy 2006 - Department of Mines
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National Mineral Policy 2006 - Department of Mines

National Mineral Policy 2006 - Department of Mines National Mineral Policy 2006 - Department of Mines

planningcommission.gov.in
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12.07.2015 Views

4.5 Logistics is the key to access and evacuation. As stated above, large mining majorsthe world over create their own infrastructure. Resource companies such as CVRD, RioTinto, and BHP Billiton 1 own and operate dedicated infrastructure including railways andports. BHP Billiton runs the highest axle load railway in the world with single lines capableof carrying more than 100 million tonnes. In fact, all mining majors establish and rundedicated heavy haul freight railways. CVRD’s logistics division carries 37 per cent ofBrazil’s rail cargo. Port Hedland, which is run by BHP Billiton, is capable of shipping 110million tonnes of iron ore, and Port Lambert, which is operated by Rio Tinto, ships 50 milliontonnes of iron ore a year. India’s major port, Visakhapatnam port, ships around 50 milliontonnes of all commodities. The Indian stand alone mining community (with individualproduction capacity above 3 million tonnes) has also started looking at infrastructure as anarea of investment for increasing product value through better access to markets and savingon costs, especially transportation costs—for example, roads built and maintained by miningcompanies in Goa and Bellary, and in the east, railway lines from Haridaspur to Paradip,cutting the distance between the two destinations from 123 km to 82 km, partly financed bymining companies in Orissa. If cluster mining is encouraged as proposed elsewhere in thisreport, such infrastructure can be expected to cover even wider areas with large miningcompanies taking interest in smaller deposits. Apart from the build–operate–transfer (BOT)model, mining majors can also contribute to infrastructure creation through other models inthe public–private partnership (PPP) mode. A roadway or railway for dual use can receivecapital funding from mining majors in return for guaranteed movement of cargo of fixed orflexible quantities for fixed or flexible durations. Mining majors can contribute toinfrastructure Special Purpose Vehicles (SPVs) jointly with state or Central PSUs run onprofessional lines.4.6 Thus, as far as the large-scale mining companies are concerned, the issue is mainly ofinstitutional support by the state and Central agencies to the miners, enabling them to putinfrastructure in place. As and when the mining sector is opened up to mining majors, bothforeign and domestic, they would look for putting up road and rail linkages, powerinfrastructure to access the grid, and social infrastructure in terms of habitations for theworker population. This will require an enabling environment by way of support from local1 CVRD is located in Brazil, Rio Tinto in the UK, and BHP Billiton in Australia.96

administration in terms of facilitating access to land, interlocution with the local populationfor surface rights, and general receptivity for mining activity as a constructive intervention inthe growth process. Designing an agency that can perform these tasks is one of the challengesbefore us.INFRASTRUCTURE NEEDS OF THE SME SECTOR4.7 The current situation is that in the main, India’s non-captive mining is in the SMEsector. Table 4.1 gives the distribution of the current levels of production of minerals in Indiabetween mining majors and the SME sector. Iron ore, bauxite, and limestone account for thelargest part of mining activity in the country. A major part of the large-scale sectorproduction is under captive mining, which have their own dynamics in terms of technologyused and ore extracted as these are driven by the requirements of specific downstream unitsrather than by the economics of demand, supply, and prices in the industry as a whole. Table4.2 provides a view of the mining sector proper. Iron ore, limestone, and bauxite, being themost easily explored minerals, account for the largest mining activity in both the large-scaleas well as the SME sectors. However, both in quantitative terms as well as in percentageterms, the share of the SME sector dominates across the board in the main minerals. If weleave aside captive mining, then in terms of production, area covered, and the number ofleases, the SME sector far outweighs the large-scale sector. India’s SME sector is tooinsignificant to count as a mining activity of substance. SME sector mining exists only in usercountries that do not have large resource bases and is akin to primitive mining becausetechnologies require scale. India’s rather antiquated exploration technology has thrown up anumber of small deposits and these deposits are picked up by SME sector operators. Theinfrastructure problems of the SME sector in India are also unique to the Indian situation andrequire location-specific solutions.97

administration in terms <strong>of</strong> facilitating access to land, interlocution with the local populationfor surface rights, and general receptivity for mining activity as a constructive intervention inthe growth process. Designing an agency that can perform these tasks is one <strong>of</strong> the challengesbefore us.INFRASTRUCTURE NEEDS OF THE SME SECTOR4.7 The current situation is that in the main, India’s non-captive mining is in the SMEsector. Table 4.1 gives the distribution <strong>of</strong> the current levels <strong>of</strong> production <strong>of</strong> minerals in Indiabetween mining majors and the SME sector. Iron ore, bauxite, and limestone account for thelargest part <strong>of</strong> mining activity in the country. A major part <strong>of</strong> the large-scale sectorproduction is under captive mining, which have their own dynamics in terms <strong>of</strong> technologyused and ore extracted as these are driven by the requirements <strong>of</strong> specific downstream unitsrather than by the economics <strong>of</strong> demand, supply, and prices in the industry as a whole. Table4.2 provides a view <strong>of</strong> the mining sector proper. Iron ore, limestone, and bauxite, being themost easily explored minerals, account for the largest mining activity in both the large-scaleas well as the SME sectors. However, both in quantitative terms as well as in percentageterms, the share <strong>of</strong> the SME sector dominates across the board in the main minerals. If weleave aside captive mining, then in terms <strong>of</strong> production, area covered, and the number <strong>of</strong>leases, the SME sector far outweighs the large-scale sector. India’s SME sector is tooinsignificant to count as a mining activity <strong>of</strong> substance. SME sector mining exists only in usercountries that do not have large resource bases and is akin to primitive mining becausetechnologies require scale. India’s rather antiquated exploration technology has thrown up anumber <strong>of</strong> small deposits and these deposits are picked up by SME sector operators. Theinfrastructure problems <strong>of</strong> the SME sector in India are also unique to the Indian situation andrequire location-specific solutions.97

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