Role of Mining Industry in Indian Economy
The Mining industry in India is a major economic activity which contributes significantly to the economy of India. The GDP contribution of the mining industry varies from 2.2% to 2.5% only but going by the GDP of the total industrial sector it contributes around 10% to 11%. Even mining done on small scale contributes 6% to the entire cost of mineral production. Indian mining industry provides job opportunities to around 700,000 individuals.
India is the largest producer of sheet mica, the third largest producer of iron ore and the fifth largest producer of bauxite in the world. India’s metal and mining industry was estimated to be $106.4bn (£68.5bn) in 2010.
Along with 48.83% arable land, India has significant sources of coal (fourth-largest reserves in the world), bauxite, titanium ore, chromite, natural gas, diamonds, petroleum, and limestone. According to the 2008 Ministry of Mines estimates: ‘India has stepped up its production to reach the second rank among the chromite producers of the world. Besides, India ranks 3rd in production of coal & lignite, 2nd in barites, 4th in iron ore, 5th in bauxite and crude steel, 7th in manganese ore and 8th in aluminium’.
India accounts for 12% of the world’s known and economically available thorium. It is the world’s largest producer and exporter of mica, accounting for almost 60 percent of the net mica production in the world.
The net production of selected minerals in 2005-06 as per the Production of Selected Minerals Ministry of Mines, Government of India is given in the table below:
|Natural Gas||31,007||Million cubic metres||Fuel|
|Crude Petroleum||32||Million tonnes||Fuel|
|Bauxite||11,278||Thousand tonnes||Metallic Mineral|
|Copper||125||Thousand tonnes||Metallic Mineral|
|Gold||3,048||Thousand grammes||Metallic Mineral|
|Iron Ore||140,131||Thousand tonnes||Metallic Mineral|
|Lead||93||Thousand tonnes||Metallic Mineral|
|Manganese Ore||1,963||Thousand tonnes||Metallic Mineral|
|Zinc||862||Thousand tonnes||Metallic Mineral|
|Diamond||60,155||Carats||Non Metallic Mineral|
|Gypsum||3,651||Thousand tonnes||Non Metallic Mineral|
|Limestone||170||Million tonnes||Non Metallic Mineral|
|Phosphorite||1,383||Thousand tonnes||Non Metallic Mineral|
Impact of currency depreciation
- The Rupee’s depreciation is on balance and is positive for the Indian mining sector. Most of the mining companies in India are net exporters and would experience a positive impact on bottom lines.
- The ban on iron-ore mining in Karnataka and Goa resulted in a current account deficit, making it imperative for the government to curb imports and promote exports.
- Hikes in export duty, and restriction on mining and blanket bans have prevented the government from earning forex revenue on exports.
Future of the mining industry in India
- Despite the slowdown, India is still the second-fastest growing economy, after China.
- Demand for minerals, as well as for mining services, is robust in the country.
- Mining in India is becoming more structured, and companies have started outsourcing part of the project to mining service companies.
- The largest mining company in India, i.e., Coal India Limited (CIL), plans to invest around INR254 billion during the Twelfth FYP (2012–17).
- Contract mining could prove to be a solution to the on-going current coal deficit in country.