Mining, Minerals and

Sustainable Development

December 2001

No. 185

Overview of Mining and

Mineral Industry in India

Tata Energy Research Institute

New Delhi

This report was commissioned by the MMSD project of IIED. It remains the sole
responsibility of the author(s) and does not necessarily reflect the views of the
MMSD project, Assurance Group or Sponsors Group, or those of IIED or WBCSD.

Copyright 2002 IIED and

WBCSD. All rights reserved
Mining, Minerals and
Sustainable Development is
a project of the International
Institute for Environment
and Development (IIED).
The project was made
possible by the support of
the World Business Council
for Sustainable Development
(WBCSD). IIED is a
company limited by
guarantee and incorporated
in England. Reg. No.
2188452. VAT Reg. No. GB
440 4948 50. Registered
Charity No. 800066

A suggested format for citing this report is as follows.

T E R I. 2001
Overview of mining and mineral industry in India
New Delhi: Tata Energy Research Institute. 94 pp.
[T E R I Project Report No. 2001EE42]

For more information about this report, please contact

Centre for Environmental Studies
TERI
Darbari Seth Block
Habitat Place, Lodhi Road
New Delhi 110 003 / India

Telephone +91 11 468 2100 or 468 2111

E-mail [email protected]
Fax +91 11 468 2144 or 468 2145
Web www.teriin.org

Table of contents
Chapter 1 Introduction and objectives
1.1

Introduction ............................................................................01

1.2

Objectives.................................................................................01

1.3

Methodology........................................................................... 02

1.4

Report outline......................................................................... 03

Chapter 2 The Indian minerals sector

2.0

The Indian mineral sector ..................................................... 05

2.1 Introduction...................................................................... 05
2.2 History of Indias mineral sector .................................... 06
2.3 Current status of mining industry in India .................... 08
2.4 Economic issues................................................................ 19
2.5 The current regulatory and policy framework ................27
2.6 Small scale mining sector................................................ 48
2.7 Community issues.............................................................53
2.8 Environmental effects of mining .....................................67
2.9 Corporate investment considerations .............................79
2.10 Summary of the findings of the study........................... 84

Chapter 3 Sustainable development of mining areas

3.1

Priority areas for further research ........................................ 85

3.1.1 Developing tri-sector partnership in mining areas ..... 85
3.1.2 Mine closure: issue and options................................... 86
3.1.3 Small-scale mining: issues............................................ 88

3.2

Policy reforms for contribution towards sustainable

development in mining areas ................................................ 89

Annexures 1-10 ................................................................................. (i-xxxii)

Abbreviations

Introduction and objectives

1.1 Introduction
This report has been prepared in response to the Terms of Reference (ToR)
issued by the Director, Mining, Minerals and Sustainable Development (MMSD)
project. The MMSD project is an independent process of participatory analysis
with the objective of identifying how mining and minerals can best contribute to
the global transition to sustainable development. The project is managed
through the International Institute for Environment and Development (IIED),
London, and funded, predominantly, by the Global Mining Initiative (GMI), a
grouping of the major global mining houses. In this context, the report seeks to
provide an overview of the mining and minerals sector in India and the issues
that have a bearing on the role of the sector in the society, economy and
environment of the country.

1.2 Objectives
The focus of the country study is to prepare on overview of the mining
(including processing of ore) and mineral industry and its impacts on
sustainable development. The report would analyse the issues, which arise from
peoples expectations of the mining industry. In broader terms, the study would
cover the following:
Contribution of mining towards economic development both at national and
regional level;
Contribution of mining to social development at national and local levels;
Environmental impact of mining which would cover, among others, land
use, management of waste, loss of biological diversity, etc; and
Conflicts and the mechanism available for resolution of disputes.
More specifically, the report covers the following:
A general survey of the minerals sector in India
-

principal products

kinds of enterprises (multinationals, state companies, national private

companies, artisanal mines)

employment in the sector and livelihoods

Introduction and objectives

value of production

marketing of production (domestic, export, value added)

importance in overall economy as measured by GDP, balance of

payments, export earnings)

other general data

Case examples of campaigns against unjust mining by social action groups;

Case examples of good practices being adopted by companies for
environmental protection and community development;
List of relevant institutions with contact information. These would be NGOs
focussed on mining activities from development, environmental, human
rights or other perspectives; government institutions and officials concerned
with the industry; labour organisations and their leaders; major companies,
industry associations, community leaders in communities impacted by
mining, etc.
Recommendations on (i) priority areas for future research; (ii) priority
changes in policy necessary to increase the contributions of this sector to
sustainable development.

1.3 Methodology
Due to the limited resources and time available for this study there was no
opportunity to visit mining companies or to speak to a wide range of
stakeholders. One visit was made to Nagpur for discussion with senior
officers of a local coal company (WCL) and Indian Bureau of Mines. In
addition, visits were made to concerned government departments, FIMI and
other agencies.
Detailed literature review was carried out. This material included
publication of Indian Bureau of Mines, National Accounts Statistics and
other relevant documents, DGMS reports, seminar / conference / workshop
proceedings conducted during the last 5 years, NGO publications, etc.
In addition, letters were addressed to mining companies and some NGOs for
sharing information especially relating to environmental production,
technology updation and social / community issues. There was response
only from a few companies and one NGO. The report has been prepared
based on the information / data collected and discussion with officials in
different organization.

T E R I Report No. 2001EE42

Introduction and objectives

1.4 Report outline

Chapter 2 provides bulk of the information on the status of the mining and
mineral industry in India. This covers exploration, production, processing,
economic issues; policy and regulatory issues including institutional framework;
small scale mining and environmental impacts and community issues.
Chapter 3 lists the priority areas for further research / study including policy
reforms, which are needed in the sector.

T E R I Report No. 2001EE42

Title of the chapter

The Indian minerals sector

2.0 The Indian mineral sector

2.1 Introduction

India is a country of large dimensions. It spreads over a geographical area of

3.29 million square kilometres, which is about 2.5 per cent of the globe and
makes the country the seventh largest in the world. Its population of over 1,000
million ranks it the second largest only next to China. India is Asias third and
worlds eleventh largest economy.
The metallurgical and mineral industries constitute the bedrock of industrial
development as they provide the basic raw materials for most of the industries.
India produces as many as 84 minerals comprising 4 fuel, 11 metallic, 49 nonmetallic industrial and 20 minor minerals. Their aggregate production in 19992000 was about 550 million tonnes, contributed by over 3,100 mines (reporting
mines) producing coal, lignite, limestone, iron ore, bauxite, copper, lead, zinc
etc. More than 80 per cent of the mineral production comes from open cast
mines and therefore, one must add the quantity of overburden to that of the
mineral production in order to assess the total amount of annual excavation in
Indias mining sector. The mining leases numbering 9,244 are spread over 21
States on about 13,000 mineral deposits occupying about 0.7 million hectares
which is 0.21 per cent of the total land mass of the country. The aggregate value
of the mineral production in 1999-2000 was more than Rs. 450 billion
(approximately $10 billion). The distribution of the value of mineral production
shows that fuel minerals accounted for about 82% (of which solid fuels 44% and
liquid /gaseous fuels is 38%), metallic minerals about 8%, non-metallic minerals
4% and the balance 6% is contributed by minor minerals.
The Mineral Policy opened the gates of Indian mineral industry to domestic
and foreign investment, much of which was earlier reserved for the public
sector. It aims to boost the countrys exploration and mining efforts and render
the mineral industry more competitive.
In October 1996, the ministry of steel and mines, Government of India,
issued guidelines for grant of large areas for aerial prospecting under the
provisions of the amended MM(R&D) Act. As a sequel to this directive, foreign
investors evinced keen interest for investment in carrying out aerial prospecting

T E R I Report No. 2001EE42

The Indian minerals sector

operations especially for base metals, diamond and gold in the states of
Rajasthan, Mahrashtra, Uttar Pradesh, Bihar & Gujarat. The total area covered
for aerial prospecting in these states till March 1999 were about 71, 000 sq. kms.
for minerals like copper, lead, zinc, gold, silver, diamond, cadmium, bismuth,
nickel, cobalt and molybdenun. The statewise details are as follows: Rajasthan
61938 sq. km., Mahrashtra 3490 sq. kms., Uttar Pradesh 2956 sq. kms., Bihar
2472 sq. kms and Gujarat 206 sq. kms.

2.2 History of Indias mineral sector

The history of mineral development is as old as the civilization. In case of India,
the mineral production dates back to the ancient times as the mining activities
can be traced as far back as 6,000 years or so. The remains of some of the old
mine workings are a witness to this fact. A few of these workings have led to the
discovery of a number of significant mineral deposits, which are being worked in
the present time. These include the lead-zinc deposit at Zawar, copper deposit at
Khetri, and gold deposits in Karnataka. Techniques used specially in smelting
were in fact ahead of the time in which they were applied. Rust-free iron pillar in
New Delhi is considered to date back to the 4th Century.
In recent times the impetus to the mineral development was imparted in the
country only after the political Independence came in the year 1947 when the
significance of role of minerals was realized in nation building. On the eve of
Independence, the annual value of mineral production was merely Rs. 0.58
billion and only a few minerals were mined and the country largely depended on
imports of commodities such as copper, lead, zinc, sulphur, graphite, petroleum
and their products. The inventory details were available only in respect of coal,
iron ore, chromite, bauxite, manganese ore and magnesite.
Realising the significance of industrial development of the country,
Industrial Policy Resolution was promulgated in 1956 by the Central
Government. The exploration of minerals was intensified and the Geological
Survey of India was strengthened for the purpose. The Indian Bureau of Mines
(IBM) was established to look after the scientific development and conservation
of mineral resources. IBM was also assigned the responsibility of conducting
exploration with more of emphasis on coal, iron ore, limestone, dolomite, and
manganese ore keeping in view the requirement of the proposed steel plants.
Later, in 1972 when the Mineral Exploration Corporation was established, this
function was transferred to it.
Under the Industrial Policy Resolution 1956, ambitious programme of
developing several industries (such as steel, non-ferrous metals, cement, power,

T E R I Report No. 2001EE42

The Indian minerals sector

fertilizers, etc.) were launched which required increasing quantities of minerals.

Coal was the one to have received the maximum attention for being the basic
fuel for a whole range of industries such as steel, railways and power plants.
Capacity for large-scale production of various minerals was created in the
public sector, which is summarized as follows:
Name of the company

Year of creation

National Coal Development Corporation(NCDC)

1956

National Mineral Development Corporation (NMDC)

1958

Bharat Aluminium Company (BALCO)

1965

Pyrites, Phosphates and Chemicals Ltd. (PPCL)

1960

Hindustan Zinc Ltd.(HZL)

1966

Neyveli Lignite Corporation Ltd. (NLC)

1957

Hindustan Copper Ltd.(HCL)

1967

Bharat Gold Mines Ltd.(BGML)

1972

Steel Authority of India (SAIL), formerly Hindustan Steel Ltd

1973

The entire production of lignite, petroleum and natural gas, copper, lead- zinc
ores, gold, silver, diamond, tungsten concentrates, pyrites, rock phosphate, etc.
was contributed from the mines operated under the public sector.
In the infancy of mineral consuming industry, no significance was assigned
to beneficiation of minerals, therefore, only high-grade minerals were mined.
With the concept of conservation of minerals assuming an important role,
mineral processing plants were set up. National Metallurgical laboratory was
established in 1950.for undertaking beneficiation tests. During the same year,
the Metal Corporation of India set up the first beneficiation plant in the country
to process its lead-zinc ore. A number of coal washeries were set up in the 1950s
to beneficiate coking coal required for the steel plants. As the significance of
mineral processing was realised, Indian Bureau of Mines (IBM) set up a pilot
plant of 250 kg/hour capacity which played an important role in designing
commercial beneficiation plants in the country. In order to meet the growing
requirement in mineral beneficiation, IBM set up two processing laboratories at
Ajmer and Bangalore followed by a modern plant at Nagpur. A number of
beneficiation plants were set up in the mines producing copper ore, lead-zinc
ore, manganese ore and iron ore.

T E R I Report No. 2001EE42

The Indian minerals sector

2.3 Current status of mining industry in India

2.3.1 Mineral resources
The country is having a well-developed mining sector, which has vast geological
potential with over 20,000 known mineral deposits. Up to the Seventh Plan
period (1990), significant progress was made in the development of mineral
resources in the country which is amply depicted in the appreciation of mineral
inventory. This helped the country to enter the realm of plenty in respect of
certain minerals in which it was hitherto deficient. The discovery of huge bauxite
deposits, particularly in the East Coast, is a case in point, which took the country
from the phase of a nonentity to one having the fifth largest inventory of bauxite
in the world. In the Eighth Plan, greater emphasis was laid on mineral
exploration by adoption of improved technologies like remote sensing,
geotechniques, etc., particularly for those minerals in which the resource base of
the country is poor such as gold, diamond, nickel, tungsten, rock phosphate,
sulphur, etc.
The Geological Survey of India, State Directorates of Mining and Geology,
Public Sector Units like NMDC, MEC, HCL, CMPDI, HZL, BGML etc are the
agencies for surveying, mapping and exploration of new deposits and
reassessment of older deposits / mines. Out of the total area of 3.29 million sq.
kms. of the country, systematic geological mapping of 3.15 million sq. kms. have
been carried out by GSI. As a result of the cumulative efforts of the various
agencies involved, considerable inventory has been added to most of the mineral
deposits in the country. The recoverable reserves status of some important
minerals are given in Table 1.
Table 1 Recoverable reserves of mineral/ore in India (1970 & 1995)
Recoverable reserves ( million tonnes )
Mineral/Ore

1970

1995

Iron Ore (hematite)

8244

10,052

Iron Ore (magnetite)

2025

3,408

108

167

Bauxite

233

2,462

Copper Ore

244

461

Manganese Ore

Lead & Zinc Ore

107

176

Dolomite

1152

4,386

Limestone

73199

75,678

86

94000

210000

Chromite
Coal

Note: 1For coal it is total geological reserve

T E R I Report No. 2001EE42

The Indian minerals sector

Today, the reserves details are available for as many as 20,000 mineral deposits
all over the country. The Indian Bureau of Mines has prepared inventory of
mineral deposits for the country and updates it every five years. The country is
self sufficient in case of 36 minerals and, deficient in respect of a number of
minerals. The position is summarized as follows (Table 2).
Table 2 Mineral reserves in India
Grouping
Fuel Minerals

Abundant

Adequate

Deficient

Noncoking coal

Lignite

Coking coal

Petroleum crude

Iron ore

Chromite

Chromite

Nickel, Tungsten, Cobalt,

(metallic),

(refractory grade)

Molybdenm, Vanadium

Bauxite(chem), Copper,

Antimony, Gold,

Lead

Platinum group of

Apatite, Rockphosphate,

Sulphur, Potash

Metallic minerals
(ferrous)

Scarce

Manganese
Metallic minerals (Non-

Bauxite (metallurgical

ferrous)

Zinc

grade)

minerals , Tin
Industrial minerals

Dolomite, Gypsum,

Graphite

Limestone, Mica,
Precious stones

--

Kyanite
--

--

Diamond, Emerald,
Saphire, Ruby

The search for minerals did not remain confined to landmass only. It was
extended to off shore area and even deep ocean. Result was the discovery of
large petroleum deposits in the Arabian Sea which came to be known as Bombay
High. The exploration work in the deep ocean led to the discovery of
polymetallic nodules bearing cobalt, nickel, copper and manganese at a depth of
3,000 metres. This work earned India the status of Pioneer Investor in seabed
mining conferred by the United Nations.

Mineral production
Mining leases. The total number of mining leases granted in the country for
different minerals as on March 1998 were 9244 covering an area of about 0.7
million hectares and spread over 255 districts in 21 states. The following ten
states together account for 93% of the total leases granted: Gujarat (15%),
Rajasthan (14.5%), Andhra Pradesh (14%), Madhya Pradesh (13.5%), Karnataka
(11%), Tamil Nadu (7%), Orissa (6.5%), Bihar (4.7%), Goa (4.3%) and
Mahrashtra (2.4%). Out of 9244 mining leases, 639 (7%) leases were in the
public sector covering an area of 0.47 Mha and the balance in the private sector.
In all 3100 mines located in 19 states / union territories were reported to have
worked during 1999-2000 of which 566 mines belong to fuel minerals, 561 to
metallic minerals and 1973 to non-metallic minerals. This may not include all

T E R I Report No. 2001EE42

10

The Indian minerals sector

the mines working minor minerals in different states. There were 828 mines in
public sector and the rest in private sector. About 80% of the reporting mines
were concentrated in seven states namely, Madhya Pradesh, Rajasthan, Gujarat,
Andhra Pradesh, Bihar, Orissa and Karnataka. The Public Sector contributes
100% of copper, diamond, lead, silver and zinc and lignite; 98% of coal, 60% of
iron ore and 50% of manganese, bauxite, chromite and dolomite in the total
mineral production.
The value of mineral production during 1999-2000 was estimated at
Rs.452.3 billion of which the contribution from public sector was Rs.378.4
billion (84%). In the total value of mineral production, fuel minerals accounted
for Rs.372.3 billion (82%), metallic minerals at Rs.34.2 billion (8%) nonmetallic minerals Rs.18.3 billion (4%) and minor minerals Rs.27.6 billion (6%).
The mineral production in 1970-71, 1990-91 and 1999-2000 are given in Table 3.
Table 3 Production of some selected minerals in India (by mineral groups)
Mineral

Unit

1970-71

1990-91

1999-2000

Fuel minerals
Coal

Million tonnes

73.7

211.3

300.0

Lignite

Million tonnes

3.5

14.0

21.9

Crude oil

Million tonnes

33.0

32.0

Natural gas

BCM

18.0

26.4

Metallic minerals
Bauxite

Million tonnes

1.4

5.0

6.8

Chromite

Million tonnes

0.3

0.9

1.7

Copper ore

Million tonnes

0.5

5.3

3.1

Iron ore

Million tonnes

31.4

55.5

73.5

Manganese ore

Million tonnes

1.7

1.5

1.6

Lead & zinc ore

Million tonnes

NA

2.7

Gold ore

Million tonnes

NA

0.7

Non metallic minerals

Limestone

Million tonnes

23.8

70.1

127.9

Dolomite

Million tonnes

1.1

2.6

2.9

Gypsum

Million tonnes

NA

1.7

3.3

Diamond

(000 Carats)

20

18

41

As can be seen from the table, there has been a rapid growth in the production of
coal and lignite, iron ore and limestone in the past three decades. A list of major
mining and mineral companies in the public and private sector is given in
Annexure 1. A list of mining and industry associations is given in Annexure 2.

T E R I Report No. 2001EE42

11

The Indian minerals sector

Mineral processing and mineral based industry

The National Mineral Policy, 1993 facilitated the growth of mineral based
industries through investment in the private sector. As per the policy, processing
units which desire to develop captive mines to secure assured supplies of raw
material are allowed foreign equity participation in the manner and to the extent
applicable to such processing units. The major mineral based products are pig
iron, sponge iron, crude steel, ferro alloys (ferro-chrome, ferro- manganese,
ferro silicon, charge-chrome), non ferrous metals (aluminium, copper, lead ,
zinc), dry cell batteries, cement, asbestos cement, ceramics, glass and
glasswares, fertilisers and chemicals.
There has been a significant increase in the mineral processing activity in
respect of various minerals. This is indicated by Production Processing Index
which denotes the percentage of domestic mine production processed within the
country and is given in Table 4.
Table 4 Extent of mineral processing of domestic mine production of principal minerals in 199899
Mineral

Quantity

Production

metallic compound contained

Quantity produced in terms of

Processing stage

processed

Processing

(million tonnes)

(million tonnes)

Index (%)

1.59

53.7

Metallic minerals
Bauxite

2.96

Alumina, refractory,
abrasive, chemical

Chromite

0.51

Chromite

0.30

58.8

Iron ore

45.3

Pig iron including

19.6

43.3

Manganese ore

0.56

Ferro manganese, iron

0.36

64.3

Refined metal

0.19

100

Oil wells drilling

0.1

15.6

2.92

100

sponge iron, steel

& steel, battery, EMD,
chemical
Zinc (conc.)

0.19

Non metallic minerals

Barytes

0.66

chemicals, paints
Dolomite

2.92

Iron & steel, refractory

and others

Gypsum

3.93

Cement & others

3.79

96.3

Limestone

113.6

Cement, iron & steel,

99.3

87.5

Magnesite

0.35

Refractories, Dead

0.27

76.7

Rock phosphate

0.40

0.39

99.5

others and chemicals

burnt magnesite
Phosphatic fertilisers &
chemicals

T E R I Report No. 2001EE42

The Indian minerals sector

12

Scenario by principal minerals

Bauxite
The huge bauxite resources place India fifth amongst bauxite producing
countries in the world. The total recoverable resources in the country as on
1.4.1995 are 2,462 million tonnes of which 768.2 million tonnes are under
proved, 586.4 million tonnes under probable and 1,107.8 million tonnes under
possible category. These deposits spread over a number of States notably Orissa,
Andhra Pradesh, Madhya Pradesh, Gujarat, Maharashtra and Bihar. At 86 per
cent of the total, the Indian bauxite deposits are predominantly of metallurgical
grade. Compared to this, refractory grade at one per cent and chemical grade at
0.36 per cent make the country seriously deficient in these grades.
During the year 1999-2000, the production of bauxite was 6.85 million
tonnes. The production had gradually picked up after the discovery of East Coast
bauxite. It was 4.8 million tonnes in the beginning of the 90s and increased to
6.8 million tonnes mark in the year 1999-2000. The production of came from
166 mines. As much as 81 per cent production was contributed by 30 mines
belonging to 9 principal producers which include NALCO, INDALCO,
HINDALCO, BALCO, MALCO, Swati Minerals, Saurashtra Calcine Bauxite &
Allied Industries, Saurashtra Cements and MP State Mining Corporation. Daily
employment in mines is about 7,000 workers.
Amongst the States, Orissa is the leading producing State at 42 per cent.
Bihar at 18 per cent, Gujarat at 14 per cent, Maharashtra at 13 per cent and
Madhya Pradesh at 10 per cent are other significant contributors to production
efforts.
The total bauxite consumption in the country was 5.4 million tonnes during
the year 1998-99. Of this, about 60 per cent are consumed by metallurgical
industry in producing alumina and aluminium and rest is shared by cement,
refractory, chemical and abrasive industries. Aluminium industry uses bauxite
bearing 58 per cent Al2O3. Slightly lower grades are also used for the purpose
after blending. About one lakh tonnes of bauxite is exported to countries such as
China, Korea, Ukraine and Saudi Arabia.
About 610,000 t of aluminium metal is produced in smelters of HINDALCO
(Renukoot), NALCO (Angul), BALCO (Korba), INDALCO ( Hirakud, Alupuram,
Belgaum) and MALCO (Mettur). The country produces alumina for aluminium
production and also for exports. Presently the production is around 1.97 million
tonnes from the plants of the above companies.

T E R I Report No. 2001EE42

The Indian minerals sector

13

Chromite
As on 1.4.1995, the chromite recoverable resources of the country were 86.23
million tonnes of which 28.68 per cent were under proved category, 35.70 per
cent under probable and 34.47 per cent were under possible category. As much
as 97 per cent deposits are located in Orissa. About 34 per cent of the reserves
are of metallurgical grade and 29 per cent are charge chrome grade.
During the year 1999-2000, the chromite production was 1.69 million tonnes
which came from 20 mines. Tata Iron and Steel Company, Orissa Mining
Corporation, Ferro Alloys Corporation and Indian Metal and Ferro Alloy are the
four companies, which contribute 93 per cent production from 11 mines. The
production comes mostly from open cast mines. However, there are
underground mines in Byrapur, Karnataka and Boula and Kathpal, Orissa.
Orissa contributes as much as 99 per cent production. The employment in
chromite mines is around 7,000.
The chromite ore is consumed in manufacturing ferro alloys including
charge chrome, chemicals and refractories.
Copper ore
Recoverable resources of copper ore were 461 million tonnes as on 1.4.1995.
These reserves contain 4.7 million tonnes of copper metal at 1.02 per cent of
metal content in the ore. About 40 per cent of the reserves are under proved
category. Probable category has 35 per cent and the share of possible category is
25 per cent. Major deposits are located in Madhya Pradesh, Rajasthan and
Bihar.
The country produced 3.12 million tonnes of copper ore in 1999-2000
containing 35,000 t of copper metal. from mines located in Bihar, Rajasthan,
Madhya Pradesh and Sikkim. This production was contributed by 10 mines
belonging to Hindustan Copper Ltd and Sikkim Mining Corporation. Mines such
as Khetri and Kolihan are highly mechanised underground mines. Chandmari
and Malanjkhand are open pits. The later is the largest hardrock open cast mine
in the country producing 2 million tonnes of ROM per annum. The total annual
excavation is around 10 million tonnes. Malanjkhand also has a matching
concentrator plant. The total employment in copper mines is around 6,000.
There are two smelters in the public sector located at Khetri and Ghatsila
with installed annual capacity of 31,000 and 16,500 t respectively. These
smelters also produce by-products such as gold, silver, selenium, tellurium,
nickel sulphate, phosphoric and sulphuric acids. Expansion programme of these
smelters to 100,000 t and 25,000 t is under consideration. Two smelters in the

T E R I Report No. 2001EE42

The Indian minerals sector

14

private sector have already been commissioned. These belong to Starlit Copper
Company (100,000 tpy at Tuticorin) and another owned by Birla Copper
(100,000 tpy at Dahej in Gujarat). A smelter by SWIL Ltd based on 50,000 t
scrap annually in Bharuch district, Gujarat) and Metadist (150,000 tpy in
Amroli district, Gujarat) are under installation at present.
Diamond
Reserves of diamond are found in Madhya Pradesh, Andhra Pradesh and also in
Orissa. The recoverable reserves, as on 1.4.1995 were 982,000 carats.
Production of diamond during the year 1999-2000 was about 41,000 carats,
which was contributed by two mines located in Panna, Madhya Pradesh. The
mine owned by National Mineral Development Corporation at Majhgawan
accounted for as much as 99 per cent production. Merely one per cent
production came from Directorate of Geology and Mining, Madhya Pradesh. The
diamonds produced were of gem variety (29 per cent), off colour (36 per cent)
and industrial (35 per cent) variety.
The capacity of NMDC mine is to be expanded to 84,000 carats per year. India
is one of the largest exporters of cut and polished diamonds in the world. During
the year 1998-99 the exports were Rs 19,977 crone of which 37 per cent were
imported by the USA. The indigenous production is not adequate for the
purpose and therefore, large quantities of rough diamonds are imported by the
country. The diamond imports were as much as Rs 15,555 crone during the year
1998-99.
Granite
Granite has been a non-entity till 80s when it discovered for itself a fabulous
export market particularly due to the spurt in construction activities in the
Middle East. This transformed it into a precious foreign exchange earner. The
country has abundant resources of granite and keeping in view the potential for
export of granite, an assessment of the available reserves in the country was
carried out by several agencies. On account of the efforts made by GSI, IBM and
the Directorates of Geology and Mining of different States, it is estimated that
the country has as much as 1,027 mil cu m of granite reserves consisting of 160
varieties of different colour and texture. Granite reserves are found in Andhra
Pradesh, Bihar, Gujarat, Karnataka, Kerala, Madhya Pradesh, Maharashtra,
Meghalaya, Orissa, Rajasthan, Tamil Nadu, and Uttar Pradesh, etc.
During the year 1997-98, the production of granite was 1.19 mil cu m of
which 30 per cent was contributed by Tamil Nadu, 27 per cent by Karnataka, 24

T E R I Report No. 2001EE42

The Indian minerals sector

15

per cent by Andhra Pradesh, 9 per cent by Uttar Pradesh and 4 per cent by
Rajasthan. Granite mining is carried out through open cast operations of
quarrying, block splitting and processing by manual, semi mechanised and
mechanised means such as flame jet cutters. The exports of granite was 0.8
million tonnes in 1998-99 of all categories and were valued at Rs 1.0 billion. The
exports were mainly destined to USA, China, UAE, Germany and Belgium.
Granite comes under the category of Minor Minerals and is therefore
administered by the respective State Government. Looking at the significance of
granite as foreign exchange earner, there was an opinion that it should be made
a major mineral so that there is a uniform policy through out the country in
respect of its exploitation. A significant step has been taken in this direction by
the Government of India in June 1999 when it promulgated Granite
Conservation and Development Rules, 1999 in the interest of having a uniform
policy for granite development, exploitation and conservation.
Iron ore
India possesses large resources of good quality iron ore located in a number of
States such as Andhra Pradesh, Bihar, Goa, Karnataka, Madhya Pradesh,
Maharashtra, Orissa, Rajasthan, etc. The reserves are adequate to meet the
growing requirement for indigenous consumption and for exports. As on
1.4.1995, recoverable reserves measure up to 13 billion tonnes (hematite 10
billion tonnes and magnetite 3 billion tonnes) which makes India the sixth
richest country in iron ore resources in the world. The reserves are somewhat
limited in high grade ore as 8.86 bil t of hematite deposits are of medium
quality. Blending of medium grade with high grade for indigenous consumption
and for exports has been resorted to meet the quality requirement. Thus the
scenario appears to be quite comfortable. Use of iron ore fines has also helped to
further improve the situation.
India produced about 73.5 million tonnes of iron ore in 1999-2000 from
both public sector and private sector mines. Out of 213 mines (1999-2000), 34
are owned by public sector undertakings, which produce 55 per cent of the total
production. Of this, 11 mines have the capacity to produce more than one million
tonnes per annum and contribute about 48 per cent of the total output. Private
sector also has large mines of which six have annual production capacity
exceeding one million tonnes. These six mines contribute about 16 per cent to
the national production. As much as, 25 per cent production comes from
Madhya Pradesh followed by Karnataka (21%) and Goa (21%). Approximately,
34,000 persons are employed in Indian iron ore mines. About 47 per cent of the

T E R I Report No. 2001EE42

The Indian minerals sector

16

total production, is domestically consumed in iron and steel, sponge iron, ferro
alloys, and alloy steel industries. During the year 1999-2000 29.5 million tonnes
of iron ore were exported and 50% of the exports are to Japan and 22 per cent to
China.
Lead and zinc ore
The recoverable resources bearing the twin minerals in the country were176
million tonnes as on 1.4.1995. These reserves contain 2.2 million tonnes of lead
metal and 9.81 million tonnes of zinc metal. The reserves under proved category
are 39 per cent whereas probable category has 27 per cent and possible has 34
per cent. As much as 87 per cent reserves are located in the State of Rajasthan
with much smaller quantities in Andhra Pradesh, Bihar, Gujarat, Maharashtra,
Sikkim, Tamil Nadu and Uttar Pradesh.
The total production in the year 1999-2000 was 2.74 million tonnes with
overall 10.70 per cent total metal content comprising 2.06 per cent lead and
8.64 per cent zinc. The entire quantity is produced in the public sector by
Hindustan Zinc Ltd. HZL consumes this ore in its smelters having capacity of
1,52,000 zinc metal and 65,000 lead metal. Cadmium, silver, sulphuric acid and
phosphoric acid are obtained as by-products in these smelters. Binani in the
private sector operates a smelter of 30,000 t capacity based on imported
concentrates. Two small lead-smelting plants have been set up in West Bengal
and Maharashtra with a total capacity of 24,000 t per annum.
The mines at Zawar, Rajpura-Dariba and Rampura- Agucha are highly
mechanised. The first two are underground mines. Rampura-Agucha is an open
cast mine of 3000 tad production capacity which is being raised to 4,500 tad.
The mine was commissioned in May 1991 together with a smelter at Chandeliya
which proved to be a significant step in reducing dependence on imports in the
case of both the metals. There are small lead mines at Sargipalli and
Agnigundala. Total employment in the mines is approximately 5,000. Small
quantity of polymetallic ore bearing copper, lead and zinc is also produced in
Sikkim at the rate of 100 tad.
Limestone
Limestone deposits are found all over the country. The total recoverable deposit
is a fabulous 75,678 million tonnes. Of this, 16 per cent deposits are under
proved category and 23 per cent probable and 61 per cent are under possible
categories. Cement grade accounts for 68.8 per cent, 6.5 per cent SMS, 7 per
cent BF and 3.75 per cent are Chemical grades.

T E R I Report No. 2001EE42

The Indian minerals sector

17

For the last several years, the production of limestone is more than 100
million tonnes. During the year, 1999-2000 it was 129 million tonnes from 510
opencast mines. Five mines have production capacity exceeding three million
tonnes and contribute 14 per cent to the production. There are 13 mines, which
produce between two to three million tonnes with the contribution of 24 per
cent of the total production. Mines numbering 29 have capacity between 1 to 2
million tonnes and contribute 31 per cent. Thus 69 per cent production comes
from mines having production capacity exceeding on million per annum. Large
mines are mechanised and are captive to industries such as steel and cement
making. Public sector has a share of only 6 per cent.
Limestone is consumed by a large number of industries such as cement,
chemical, fertilizers, aluminium, steel, ferro alloys, foundry, glass, paper , sugar,
etc. Maximum limestone is consumed by cement industry. During the year
1998-99 as much as 89 per cent limestone was required by cement plants.
Depending upon the use to which it is put on account of its specifications ,
limestone is defined both as a major as well as a minor mineral.
Manganese ore
As on 1.4.1995, the recoverable reserves of manganese ore were167 million
tonnes of which 24 per cent were under proved category, 29 per cent probable
and 47 per cent under possible category. Battery grade accounted for 2.40
million tonnes, ferromanganese 33 million tonnes, medium grade 38.63 million
tonnes and BF grade 65.5 million tonnes. As much as 31.6 per cent of the
recoverable deposits are located in Orissa, 24.53 per cent in Karnataka, 14.13 per
cent in Madhya Pradesh and !0 per cent in Goa. Other States having deposits of
manganese ore include Maharashtra, Andhra Pradesh, Bihar, Gujarat and West
Bengal.
During the year 1999-2000, 1,57 million tonnes manganese ore was
produced in the country, which came from 135 mines, both opencast and
underground owned by 78 producers. More than half the production comes
from nine mines only each having a production capacity exceeding 50,000 t per
annum. Mines belonging to public sector numbering 23 contribute more than 58
per cent of production. The contribution by Orissa is maximum at 32 per cent,
followed by 23 per cent from Maharashtra, 21 per cent from Madhya Pradesh
and 18 percent from Karnataka. The employment in mines is approximately
15,000.
Indigenously, manganese ore is consumed in a number of industries such as
alloy steel, battery, chemicals, ferro alloys, iron and steel, zinc smelter and

T E R I Report No. 2001EE42

The Indian minerals sector

18

ceramic glass. The consumption is around one million tonnes per annum. About
10 per cent of the production is exported.

Institutions
There are many institutions which oversee the development of the mining and
mineral sector in India. At the Central Government level, there are ministries of
Coal & Mines; Steel; Industry; Chemicals & Fertilisers; Atomic Energy,
Petroleum & Natural Gas, Environment and Forests and Labour. The Ministry of
Mines in the Central Government has the overall responsibility of determining
policies and strategies in respect of non-ferrous (aluminium, copper, zinc, gold,
nickel etc.) metals. The Ministry of Mines (MoM) is responsible for survey and
exploration of all minerals, other than natural gas, petroleum and atomic
minerals. The MMR&D Act is administered by the MoM. There are two
subordinate offices, 7 public sector companies and three research institutions
under the MoM . The Ministry of Coal has the overall responsibility for the
development of coal and lignite resources.
Sub-ordinate offices under MoM:
Geological Survey of India (GSI): The GSI is the principal agency
responsible for the assessment of geological and regional mineral resources
of the country. Its areas of operation encompass scientific surveys and
research, for locating mineral resources. GSI operates through six regional
offices and four specialised wings marine, coal geophysics, airborne
surveys and training. The GSI has to its credit geological mapping, covering
an area of approximately 3.146; million sq. km, or 94 percent of the area of
India. The maps are on a 1:63,360/ 1:50,000 scale, the data having been
synthesised to produce 1:2,000,000 scale geological maps of India, which
have been correlated with the global set up as per international standards.
The GSI is also actively involved in the research and development of
mapping and exploration techniques. It has set up a chain of modern
petrological paleontological, chemical, mineralogical, geochronological,
geotechnical and geophysical laboratories in its different operational bases,
and offers its facilities and services on payment. Geological maps and data
are available with GSI on a commercial basis.
Indian Bureau of Mines (IBM): IBM is the principal government agency
responsible for compiling exploration data and mineral maps and for
providing access to the latest information in respect of mineral resources in
the country. IBM has both regulatory as well as service functions. IBM offers

T E R I Report No. 2001EE42

The Indian minerals sector

19

technical expertise and proven experience in the fields of geology, mine

planning and feasibility studies. The geological services of IBM include
survey and preparation of mine plans, preparation of geological plans,
preliminary geological appraisal of mineral properties, including the
formulation of an initial scheme of detailed exploration with estimate of cost
and preliminary reconnaissance, quick survey to determine potential areas
out of large properties, etc. IBM also performs regulatory functions, namely:
enforcement of Mines and Minerals (Regulation and Development) Act,
Mineral concession Rules, Mineral Conservation and Development Rules
and compliance with Environmental Protection Act. IBM disseminates
statistical information on mines, minerals, metals and mineral based
industries through its various publications which are available for sale on
commercial basis.
Public Sector Undertaking (PSUs)
Mineral Exploration Corporation Ltd. (MECL): MECL is responsible for
detailed exploration of various minerals/ ores by drilling and exploratory
mining and proving reserves for their eventual exploitation.
National aluminium Company Limited (NALCO), Bhubaneswar
Bharat Aluminium Company Limited (BALCO), New Delhi;
Hindustan Zinc Limited (HZL), Udaipur;
Hindustan Copper Limited (HCL), Kolkata;
Mineral Exploration Corporation Limited (MECL), Nagpur;
Bharat Gold Mines Limited (BGML), Kolar Gold Fields (Karnataka);
Sikkim Mining Corporation (a Company jointly owned by the State
Government of Sikkim and the Central Government)
Research Institutions

2.4 Economic issues

Contribution of mining and quarrying to Gross Domestic Product
(GDP)
Indias gross domestic product (GDP) at factor cost at constant (1993-94) prices
in 2000-01 was estimated at Rs.12117 billion as against Rs.7991 billion in 199394. The CAGR for the period 1993-94 to 2000-01 works out to be 5.3 percent.
The contribution of mining and quarrying sector in GDP at constant (1993-94)
prices in 2000-01 was Rs.274 billion as against Rs.197.0 billion in 1993-94. This
works out to a CAGR of 4.2% for the period 1993-94 to 2000-01. The share of

T E R I Report No. 2001EE42

20

The Indian minerals sector

mining and quarrying in GDP has marginally declined from 2.47% in 1993-94 to
2.26% in 2000-01. The details are given in Figure 1 and Table 5.
Table 5 Trends in GDP at factor cost and manufacturing and mining sectors in India (1993-94
prices)
Year

GDP

Mining

Manufacturing (Rs.

Share of mining in GDP

Billion)

(%)

7990

197

1266

2.47

1994-95

8610

215

1400

2.50

1995-96

9264

231

1611

2.49

1996-97

9990

233

1734

2.34

1997-98

10491

240

1851

2.29

1998-99

10830

260

1842

2.40

1999-00

11520

264

1967

2.30

2000-01

12117

274

2077

2.26

Rs. in billion

1993-94

14000
12000
10000
8000
6000
4000
2000
0
1993- 1994- 1995- 1996- 1997- 1998- 1999- 200094
95
96
97
98
99
00
01
Years
GDP

M ining

M anufacturing

Figure 1 Trends in GDP at factor cost and manufacturing and mining sector in India (1993-94
prices)
Source. National Accounts Statistics, 1996 & 1999: CSO
Index of mineral production
The index of total mineral production in 1999-2000 was 126.8 (1993-94 = 100)
and the CAGR from 1993-94 to 1999-2000 works out to be 4%. The index of
mineral production from 1995-96 to 1999-2000 for various minerals are given
in Annexure 3.

T E R I Report No. 2001EE42

21

The Indian minerals sector

Share of mining and mineral industry in merchandise exports and

imports
Exports
Minerals in both raw and processed forms contribute significantly to India's
exports trade. The value of exports of ores and minerals during 1998-99 was
Rs.246 billion as against Rs.66.6 billion in 1990-91. The share of mineral exports
to the total merchandise exports from the country in 1998-99 was 17.6%.
Diamond (mostly cut) continued to be the largest constituent in the exports with
a share of 81% of the mineral exports. This is followed by iron ore (6.6%),
granite (4.1%) and precious and semi-precious stones (2.8%). The individual
share of other ores and minerals was less than 1%.
The CAGR of mineral exports for the period 1990-91 to 1998-99 works out to
be 17.7%. Export of diamond (cut) was Rs.47.1 billion in 1990-91 which
increased to about Rs.200.0 billion in 1998-99. Similarly imports of raw
diamond which was Rs.36 billion in 1990-91 increased to Rs.155 billion in 199899. If diamond is excluded from total mineral exports, exports of other minerals
and ore account for only about 3.1% of the countrys total merchandise exports.
Therefore it has no significant impact on total exports. Since the country
produces very little raw diamond, most of it is imported and is cut and polished
and exported. This industry, which adds about Rs.45 billion in value to the raw
diamond, employs a large workforce.
Imports
The value of imports of ores and minerals during 1998-99 was Rs.373.5 billion
as against Rs.115.8 in 1990-91. In 1998-99 imports of ores and minerals
accounted for 21% of all merchandise imported in India. In this case also,
diamond (uncut) emerged as the largest constituent with a share of 42% of
mineral imports, followed by crude oil 40%, coal (9.5%) and rock phosphates
2.2% and copper ores and concentrates (1.5%) and coke (1.5%). The details of
exports and imports are given in Figure 2 and Table 6.
Table 6 Value of exports and imports (Rs. Billion)
Year

Total exports

Mineral exports

Share (%)

Total imports

Mineral imports

Share (%)

1990-91

325.5

66.6

20.5

432.0

115.8

26.8

1995-96

1063.5

198.2

18.6

1226.8

236.6

19.3

1996-97

1188.2

189.6

16.0

1389.2

342.9

24.7

1997-98

1301.0

206.4

15.9

1541.8

346.5

22.5

1998-99

1397.5

246.2

17.6

1783.3

373.5

20.9

Source.

1. Mineral exports and imports (Mineral Year Book: IBM of different years)
2. Total exports, imports based on DGCI & S statistics

T E R I Report No. 2001EE42

22

The Indian minerals sector

2000
1800
Value of mineral exports

Rs. in billion

1600
1400

Value of total exports

1200

Value of mineral imports

1000
800

Value of total imports

600
400
200
0
1995-96

1996-97

1997-98

1998-99

Years

Figure 2 A comparison of the trends in mineral exports and imports with total exports and imports
from India for the years between 19995-96 and 1998-99 (Rs. Billion)
Mineral as a group continued to face adverse balance of trade during 1998-99
with the total value of ores and mineral exports at Rs.246 billion as against the
total value of imports of ore and minerals at Rs.373 billion during the same year
while the total value of exports of metals and alloys was Rs.40 billion in 1998-99
as against value of imports of metals and alloys at Rs.31 billion in the same
period. The trends in mineral exports and imports for the period 1995-96 to
1998-99 are given in Figure 3 and Table 7.
Table 7 Trends in mineral exports and imports for the years between 1995-96 and 1997-98 (Rs.
Billion)
Year

Value of mineral exports Value of mineral imports

1995-96

198

236

1996-97

190

342

1997-98

206

346

1998-99

246

373

T E R I Report No. 2001EE42

23

The Indian minerals sector

400
350

Rs in billion

300

Value of
mineral
exports

250
200
150

Value of
mineral
imports

100
50
0
1995-96

1996-97

1997-98

1998-99

Years

Figure 3 Trends in mineral exports and imports for the years between 1995-96 and 1997-98 (Rs.
Billion)

Commodity wise exports in 1998-99

The value added semi processed/processed minerals figuring in India's foreign
trade include cut and polished diamonds/emerald, etc., pulverized barytes,
steatite and wollastonite, washed/processed kaolin, beneficiated graphite,
calcined magnesite; processed mica and manufactured mica products,
dimension stones; refined borax; alumina etc. The manufactured mineral based
commodities include metals and alloys and products thereof, cement, fire bricks
and other refractory materials, clay-bonded graphite crucibles/nozzles and
silicon carbide crucibles, asbestos-cement products, inorganic chemicals like
lime and fluorine chemicals, refined borax and borates, elemental phosphorus
and phosphoric acid, titanium dioxide, petroleum products etc. The details are
given Table 8.
Table 8 Contribution of value-added (processed) minerals and mineral-based products to India
export trade in 1998-99
Commodity Group
*

All Merchandise
Minerals

Raw/unprocessed form
Semi-processed/ processed forms

Value of export (Rs. Billion)

Contribution (Percentage)

1393

100

246

17.67

22

1.60

224

16.06

51

3.67

40

2.86

(Preliminary and intermediate stage of

processing)
Manufactured Mineral-based commodities
(final stage of transformation)
Metals / Alloys

T E R I Report No. 2001EE42

The Indian minerals sector

Others

24
11

0.81

*Excluding re-exports

Government revenues
The mining and mineral industry contributes to the Central and State
Government revenues through payments of royalty, dead rent, cess, sales tax,
excise duties and custom duties.
Royalty and dead rent
As per Section 9 of the Mines and Minerals (Development and Regulation) Act,
the holder of a mining lease is required to pay royalty to the State Government
in respect of any mineral removed or consumed at the rate specified in the
Second Schedule of the Act.
The Central Government by a notification in the official gazette may amend
the royalty rates specified in the Second Schedule of the Act once in 3 years. An
expert group appointed for the purpose recommends the rates to the Central
Government. The royalty rates of all minerals (excluding coal and lignite) were
revised in October 2000. A list of the notification is given in Annexure 4. It is
observed that for 30 minerals, the royalty is based on sale price on ad-valorem
basis and for metals like copper, lead, tin, zinc it is based on the London Metal
exchange prices. For gold it is based on London Bullion Market Association
price. For 18 minerals including coal and lignite, it is a fixed amount per tonne
of despatch.
As per Section 9A of the Act, the holder of a mining lease is required to pay
dead rent to the respective State Government at rates specified in the Third
Schedule of the Act for the area under the mining lease. In case the holder of the
mining lease is liable to pay royalty, he shall pay either royalty or dead rent
whichever is more. The dead rent may also be amended by the Central
Government once in a any period of three years. The details are given in
Annexure 4.
Royalty is imposed on the mining industry to generate revenue for the State
Governments. The funds collected through royalty or dead rent go to the general
pool of the respective government. Thus the mining industry does not get any
advantage out of it. There is a general feeling that a part of this fund should be
transferred to the local authorities for the development of the mining areas
which are generally located in remote, forest or tribal areas and are in need of
funds for development.

T E R I Report No. 2001EE42

25

The Indian minerals sector

A policy decision has been recently taken by the State Government of

Maharashtra with regard to allocating a part of the royalty collected on mineral
production in the State which will be spent on development of mineral
producing areas. A Mineral Development Fund has been set up the State
Government to which 10 per cent of the royalty collected is transferred. During
the last two years as much as Rs 63 crore were thus made available to the Fund
as the royalty collection was Rs 270 and Rs 360 crore. This Fund shall be spent
on the development of the infrastructure in the districts having mining activities
and also in the development of mines in the ratio of 2:1 respectively.
Payment of royalty
The amount of royalty paid by the coal sector to the various states in 1999-2000
was about Rs.21.1 billion as against Rs. 8.4 billion in 1991-92. The massive
increase in royalty payments has been due to a sharp increase in royalty rates in
1994 and also due to increase in production/despatch The rate of royalty on coal
varies from Rs.50 to Rs.175 per tonne depending on the type and grade of coal.
The rate of royalty on lignite has been increased from Rs.2 to Rs.50/- per tonne
with effect from March 2001 (Table 9).
Table 9 Royalty payment to different states by coal mines (Rs. Million)
State
West Bengal

1991-92

1999-2000

100.7

100.8

Bihar

3343.5

5881.7

Orissa

434.7

2531.7

Mahrashtra

638.9

2207.9

2400.0

6743.4

474.9

1314.8

Madhya Pradesh
Uttar Pradesh
Assam

6.4

69.6

Andhra Pradesh

1009.7

2273.4

Total

8408.8

21123.3

Excise duty
In addition to royalty, excise duty (@Rs.3.5 Rs.4.25 / tonne) on coal
production is levied by the Central Government. The purpose of this excise duty
is for carrying out protective works and developmental activities in the coal
mines. The excise duty on mineral based manufactured products is levied and
collected by the Central Government.

T E R I Report No. 2001EE42

The Indian minerals sector

26

Cess
Cess is collected on some minerals (mica, limestone and dolomite, iron-ore and
chromite) to set up welfare funds to provide housing, medical care, social
security, education and recreation facilities for workers employed in these
mines. Cess is collected by the Central Government and the Ministry of Labour
is responsible for the administration of these funds.
Sales tax
It is levied by the Central or the State Government and which is subsequently
collected by State Government.
Customs duty
The customs duty on imports of minerals and minerals products is levied and
collected by the Central Government.
Employment
As per the countrys 1991 census data, out of the total work force of 286 million
main workers, only 27 million (9.4%) are in the organised sector and 259 million
(90.6%) are in the unorganised sector. In 1991, the mining sector employed
about 0.8 million workers. The workforce in the unorganised mining sector is
not available but some estimate put it at 0.5 million. The employment of women
in the organised sector (both public and private sectors) as on march 1999 was
about 4.83 million which is 17.2% of the total organised sector employment in
the country. Of this, the employment of women in the mining and quarrying
division was 68,600 which is about 10% of the total employment in the
organised mining and quarrying sector. It is also reported that the employment
of women has been declining in the last decade in the mining sector but data is
not available.
The daily employment in mining sector was around 0.8 million in the early
1990s has been gradually declining and is estimated at 0.7 million in 1999. This
reduction was on account of the fall of employment in coal mines and non
metallic mines. During the year 1999, the share of the coal sector employment
was 70 per cent of which 0.27 million (55%) were employed in underground
mines and the balance in opencast mine and surface jobs. The details of daily
employment in coal sector from 1951 to 1999 is given below in Table 10.

T E R I Report No. 2001EE42

27

The Indian minerals sector

Table 10 Average daily employment in coal mines (1951-1999)

Year

Average daily employment in million

1951

0.35

1961

0.41

1971

0.38

1991

0.55

1999

0.49

Non coal mines

In 1999, the estimated number of working non-coal mines (excluding oil & gas
sector) were about 3100 out of which only about 1900 submitted returns to the
DGMS. The average daily employment during the year 1999 was about 0.165
million as against 0.23 million in 1991 showing a 30% decline in employment
during the decade. The details of employment for some minerals are given in
Table 11. The average daily employment in underground mines was only 9%. In
1991 38,500 female workers were employed in the non-coal mines. Iron ore,
limestone and manganese mines accounted for 44% of the total daily
employment in non-coal mines.
Table 11 Average daily employment in non-coal mines during 1999*
Minerals

No. of mines

Average daily employment

Bauxite

89

4991

Copper

7344

Gold

10

6088

105

3880

Lime stone

403

29976

Iron-ore

211

38665

Manganese

130

14807

Granites

2.5 The current regulatory and policy framework

Policy framework
Industrial policy after independence
In 1948, immediately after independence, the government introduced the
Industrial Policy Resolution. This outlined the approach to industrial growth
and development. The resolution emphasised the importance to the economy of
securing a continuous increase in production and its equitable distribution and
pointed out that the State must play a progressively active role in the
development of industries. In 1954 the Indian Parliament accepted the
socialistic pattern of society as the objective of social and economic policies. The
adoption of socialistic pattern of the society as the national objective as well as

T E R I Report No. 2001EE42

The Indian minerals sector

28

the need for planned and rapid development required that all industries of basic
and strategic importance should be in the Public Sector. The industrial policy
was comprehensively revised and adopted in 1956. The industries were classified
into 3 categories having regard to the part which the State would play in each of
them. In the first category will be industries, the future development of which
will be exclusively the responsibility of the State. The first category includes iron
and steel, coal and lignite, mining of iron ore, magnese ore, chrome ore, gypsum,
sulphur, gold and diamond and mining and processing of copper, lead, zinc, tin,
molydenum, wolfram and atomic minerals and their development was the
responsibility of the State.
To meet the new challenges from time to time the industrial policy was
modified through statements in 1973, 1977 and 1980. These policies created a
climate for the rapid industrial growth in the country. By the end of the 7 th Five
Year Plan (1990) a broad-based infrastructure had been built up. Basic
industries had been established. A high degree of self reliance in a large number
of items raw materials, intermediates, finished goods had been achieved.
New growth centres of industrial activity had emerged and a large number of
engineers, technicians and skilled workers had also been trained.
Economic reforms
India embarked on major structural economic reforms in 1991 encompassing
almost all sectors of the economic viz. Industry, trade as well as financial sector.
The main philosophy behind these reforms was the integration of the Indian
economy with the global economy, dismantling controls, welcoming foreign
investments and new state of the art technology, promoting productivity and
restructuring the public sector.
In 1991, the Government of India made a statement on a new industrial
policy. The major objectives of this policy package were to build on the gains
already made, correct the distortions or weaknesses, maintain a sustained
growth in productivity and gainful employment and attain international
competitiveness. In pursuit of the above objectives the GOI decided to take a
series of initiatives in respect of policies relating to industrial licensing, foreign
investment, foreign technology agreements, public sector and the Monopolies
and Restrictive Trade Practices (MRTP) Act.
National mineral policy
Minerals are valuable natural resources being finite and non-renewable. They
constitute the vital raw material for many basic industries and are a major

T E R I Report No. 2001EE42

The Indian minerals sector

29

resource for development. Management of mineral resources is the

responsibility of the Central and State Governments in terms of Entry 54 of the
Union List (List I) and Entry 23 of the State List (List II) of the Seventh
Schedule of the Constitution of India. Management of mineral resources has
therefore to be guided by long term national goals and perspectives. The
country is not endowed with all the requisite mineral resources. It is therefore
imperative to achieve the best use of available mineral resources through
scientific methods of mining, beneficiation and economic utilisation. These
aspects constitute the essentials of the National Mineral Policy which has
evolved over the years and was formulated in 1993, in line with the liberalisation
and the globalisation of the Indian economy. The National Mineral Policy
excludes fuel minerals which are dealt separately by the respective ministries.
The policy also emphasises certain new aspects and elements like mineral
exploration in sea bed, development of proper inventory, proper linkage
between exploitation of minerals and development of mineral industry,
preference to members of the Scheduled Tribes (indigenous people) for
development of small deposits in Scheduled Areas, protection of forests,
environment and ecology from the adverse effects of mining, enforcement of
mining plan for adoption of proper mining methods and optimum utilisation of
minerals, export of minerals in value added form and recycling of metallic scrap
and mineral waste.
The central theme of the Industrial Policy, 1991 and National Mineral Policy,
1993 have led to notable amendments in the Mines and Minerals (Regulation
and Development) Act 1957 in 1994 and 1999 and Mineral Conservation Rules,
1988 in 1995 in line with the changed policy in the sector. While on one hand the
economy demanded stimulation, there was also a need to safeguard the national
interest in the area of conservation, environment and scientific development. As
a result of this, the following broad features emerge:
1. The new policy stipulates that the induction of foreign technology and
participation in the arena of exploration and mining in case of high value
and scarce minerals shall be pursued.
2. Earlier the foreign participation was allowed only if the investor agreed to
the transfer of technology or a major exports commitment. The foreign
equity was in general restricted to 40 per cent. In case, a higher equity was
permitted, this was allowed with only strict terms and conditions. Foreign
equity is now permitted automatically up to 50 per cent by the Reserve Bank
of India and the approvals are given within two weeks.

T E R I Report No. 2001EE42

The Indian minerals sector

30

3. The Foreign Investment promotion Board (FIPB) invites, negotiate and

facilitate 100 per cent investment from international companies on the basis
of commercial viability and acceptable profitability.
4. Any company registered or incorporated in India can apply for a prospecting
license or mining lease to concerned state government.
5. The thirteen minerals earlier reserved for exploitation by the public sector
(iron ore, manganese ore, sulphur, chomite, gold, diamond, copper, lead,
zinc, molybdenum, tungsten, nickel and platinum group of minerals) have
been opened for private and also foreign investment.
6. In the interest of long term planning, the periods for which prospecting
license and mining lease can be granted and renewed have been enhanced
The maximum period for which the PL can be initially granted has been
increased to three years and the total period together with renewals have
been made five years. The maximum period for which the mining lease is
granted has been made 30 years and the minimum period is 20 years. Each
period of renewal is also 20 years.
7. No mining lease can now be granted to a private or a public party without a
proper mining plan including environmental management plan approved by
Indian Bureau of Mines. The mining plan shall be reviewed after 5 years and
a mining scheme shall be submitted for next 5 years.
8. The area under prospecting license has been increased to 10,000 sq. km
from 25 sq. km for aerial reconnaissance and geophysical surveys. The limit
for a single party and single area is 5,000 sq. km and for the whole country
10,000 sq. km. Progressive relinquishment of the areas has been made
compulsory so that only 25 sq. km is left with the prospecting company at
the end of three years.
9. Fifteen minerals have been de reserved from the First Schedule of the Act,
which means that the State Government is not required to seek prior
approval from the Central Government for granting PL or ML. These
minerals include apatite and rock phosphate, barytes, gypsum, vanadium,
kyanite, magnesite, molybdenum, nickel, platinum and other precious
metals, sillimanite, silver, sulphur, and its ores, tungsten and vanadium ores.
10. The minerals (except fuel minerals and atomic minerals) which require prior
concurrence of Central Government for grant of mineral concessions are
only 10: (asbestos, bauxite, zinc, chrome ore, precious stones, copper ore,
manganese ore, gold lead, iron ore).
11. Preferential right of the PL holder has been recognized for the grant of ML
provided the party has carried out the actual prospecting.

T E R I Report No. 2001EE42

The Indian minerals sector

31

12. Preference is given to the schedule tribes for the grant of mineral
concessions of small deposits in the scheduled areas as has been stipulated
in the National Mineral Policy.
13. As the mining operations involve acquisition of land owned by individuals
also, compensation shall be paid to the owner annually at the rate decided by
the State Governments. Also, efforts shall be made to ensure suitable
rehabilitation of the affected persons.
14. Setting up of mineral based industries and production of minerals in value
added form has been mentioned specially in the National Mineral Policy.
The limit of 50 per cent is not applicable to the captive mines of a mineral
processing plant. This means that the equity proportion allowed to the
processing plant will be available to the captive mine as well.
15. Supply of data and information by agencies such as the Geological Survey of
India has been now provided on payment basis.
16. The use of forest land for non- forest purposes is restricted. Even in case the
land is owned by private parties. Mining even including the underground
ones is a non-forest activity. In addition, no mining shall be ordinarily
undertaken in identified ecologically fragile and biologically rich area.
17. The idea of conceptual mining plan has been introduced. This has been done
in the interest of long term planning. Before commissioning mining
operations, the ultimate size of the pit shall be determined and the dumping
ground shall be so selected that the same shall not be carried out within the
limit of the ultimate size of the pit except in case of concurrent backfilling.
Further amendments to MM (RD) Act, 1957 were carried out on 20.12.1999 and
thereafter in MCR 1960 and MCDR 1988 on 17.1.2000. These amendments are
summarized below:
1. The name of Mines and Minerals (Regulation and Development) Act, 1957
has now been changed to Mines and Minerals (Development and
Regulation) Act, 1957 in order to emphasize that the stress is on
development rather than on regulation.
2. The reconnaissance operations as distinct from prospecting have been
defined. Conditions, criteria, area limits, scope of operations, etc. in regard
to reconnaissance operations have been introduced in the relevant rules.
3. Limestone has been deleted from Part C of the First Schedule to the MMRD
Act.
4. State governments are now authorized to renew PL and ML of non schedule
minerals and for minerals specified in Part C of First Schedule to the Act.

T E R I Report No. 2001EE42

The Indian minerals sector

32

5. The area restrictions of Reconnaissance Permit, PL and ML have been made

applicable statewise rather than countrywise.
6. The provisions for curbing illegal mining have been strengthened by
inserting a new section 23C in the Act.
7. The power for approving mining plan for mines other than the mines of
category A has been delegated to the State Governments in respect of certain
mining leases related to non-metallic industrial minerals.
8. Power of granting PL and ML for areas which are not contiguous has been
delegated to the State Governments except in case of coal, lignite and atomic
minerals.

Coal sector
Coal is listed in Schedule One of the MMRD Act, 1957 and as such rights for
prospecting and mining of coal are controlled by the Central Government. The
Coal Bearing Areas (Acquisition and Development) Act 1957, was enacted and its
purpose was to have greater public control over coal exploration and production
by empowering the Central Government to acquire unworked land containing or
likely to contain coal deposits.
Subsequently, the coking coal and non-coking coal mines were nationalised
in two phases coking coal mines in 1971-72 and non-coking coal mines in 1973.
Nationalisation was a response to the urgent need to make large capital
investment in the coal mines to meet the burgeoning demand; to prevent
unscientific mining and to ameliorate the working conditions of labour in the
industry. The Coal Mines (Nationalisation) Act was passed by Parliament in May
1973, under which coal mining was reserved for the public sector with few
exceptions. In 1976, two exceptions to the nationalisation policy were
introduced viz. (a) captive mining by companies engaged in the production of
iron and steel and (b) the sub-lease to private parties of small pockets of reserves
not amenable to economic development and not requiring rail transportation.
The Coal Mines (Nationalisation) Act 1973 was further amended in 1993 to allow
private coal mining for captive consumption for generation of power, washing of
coal obtained from a mine and other end uses to be notified by Government
from time to time in addition to the existing provisions.

T E R I Report No. 2001EE42

The Indian minerals sector

33

State government policies

A countrys mineral policy serves two basic objectives a) to provide guidance
to the government in drafting the legislative and regulatory framework for
implementing the policy and b) as a statement of the countrys views on key
issues and topics, providing potential investors with guidance as to the
expectations of the government. While the central government broadly lays
down the legal framework, the onus is upon the state governments, the owners
of mineral wealth, to make conditions congenial for attracting investment.
The state of Rajasthan has been able to attract sizeable investment proposals
in exploration whereas other states, albeit more rich in resources, have not been
able to attract any investment, one reason for this could be that states like
Andhra Pradesh, Karnataka, Madhya Pradesh and Orissa have not been able to
work out a clear policy for mineral development. The policy initiatives which are
required at the state levels to attract investment may be:
a) evolving a simplified time bound framework for processing the mineral
concessions
b) Recognising mining as thrust area and reviewing applications/issues of the
prospecting investors at the highest levels of administration
c) Creating a data base of mines and minerals and making it available to the
investors
d) Some states like Karnataka, Chattisgarh (newly formed states), Jharkhand
have come out with reviewed mineral policy to achieve sustainable
development of the mining and mineral industry.

Regulatory framework
Mining
The Mining and Minerals (Regulation and Development) Act, 1957 lays down
the legal framework for the regulation of mines and development of all minerals
other than petroleum and natural gas. The relevant rules in force under the
MMRD Act 1957, are the Mineral Concession Rules, 1960, and the Mineral
Conservation and Development Rules, 1988. The health and safety of the
workers is governed by the Mines Rules, 1955 and Coal Mines Regulation 1957
created under the jurisdiction of the Mines Act 1952.
The Mineral Concession Rules, 1960 outline the procedures and conditions
for obtaining a Prospecting Licence or Mining Lease. The Mineral Conservation
and Development Rules, 1988 lays down guidelines for ensuring mining on a
scientific basis, while at the same time, conserving the environment. The
provisions of Mineral Concession Rules and Mineral Conservation and

T E R I Report No. 2001EE42

The Indian minerals sector

34

Development Rules are, however, not applicable to coal, atomic minerals and
minor minerals. The minor minerals are separately notified and come under the
purview of the State Governments. The State Governments have for this purpose
formulated the Minor Mineral Concession Rules. A list of Acts, Rules,
Legialstions and Orders relating to and/or impacting on the ownership of
minerals, granting of rights to prospect and exploit minerals, land rights of
surface access, environment, forestry are given in Annexure 5.

Labour, trade unions, employees welfare, compensation

Under the Constitution of India, labour is a subject in the concurrent list where
both the Central and State governments are competent to enact legislation
subject to certain matters being reserved for the centre (Table 12).
Table 12 Labour jurisdiction: Constitutional status
Union list
Entry No.55: Regulation of labour and safety in mines and oil

Concurrent list
Entry No.22: Trade Unions; industrial and labour disputes

fields
Entry No. 61: Industrial disputes concerning Union employees

Entry No.23: Social security and insurance employment

and unemployment

Entry No.65: Union agencies and institutions for Vocational

Entry No.24: Welfare of labour including conditions of

training

work, provident funds, employers invalidity and old age

pension and maternity benefit

Safety, health and welfare of workers in mines are regulated by the Mines
Act, 1952 and the rules and regulations formed thereunder. The employment in
mines, trade unions rights and liabilities, dispute resolution, contract labour are
regulated under different Acts and Rules framed thereunder. A list is enclosed
vide Annexure 6.
The main features of the legislative framework comprise:
(a) Statutory employment rights - the protections and entitlements conferred by
law on employees, including employees in the mining industry. Such rights
have been introduced and extended over time and are to be found across a
number of different Acts, Rules and Regulations;
(b) Trade Union rights and liabilities - the rights and liabilities of Trade Unions
in respect of registration, organisation and objects, recognition and
immunities from civil action relevant to the conduct of collective bargaining
and industrial action. Again, these are statute-based, but have been subject
to extensive interpretation by the Courts;

T E R I Report No. 2001EE42

The Indian minerals sector

35

(c) The collective bargaining process - the arrangements under which the
mining companies and other major employers in the mineral sector
negotiate with recognised Trade Unions to establish terms and conditions of
employment, and deal with related matters. This includes, in particular, the
working of the Joint Bipartite Committee for the Coal Industry (JBCCI);
(d) Statutory provision for dispute resolution - based on the Industrial Disputes
Act, 1947. The provisions cover both individual complaints and grievances,
and collective disputes;
(e) The statutory control of contract labour - based on the Contract Labour
(Regulation and Abolition) Act, 1970 and notifications thereunder.
Trade unions
The central Trade Unions recognised in the mining industry currently are:
-

Indian National Trade Union Congress (INTUC)

All India Trade Union Congress (AITUC)

Centre of Indian Trade Unions (CITU)

Hind Mazdoor Sabha (HMS)

Bharatiya Mazdoor Sangh (BMS)

United Trade Union Congress (UTUC)

National organisation of labour (NLO)

National Federation of Indian Trade Unions (NFITU)

United Trade Union Centre (LS)

The list central trade union organisations are given in Annexure 7. To these
central unions there are affiliated a large number of local and regional unions for example the Indian National Mineworkers Federation, which is affiliated to
INTUC. Subscriptions of members are split between the central union and its
various affiliates. Each of the central unions has established a strong and
effective affiliation with one or the other of the major political parties; and all
maintain broad support for a nationalised mining sector. The trade union
activities have focussed on the 9% of organised workers whereas the
unorganised workers do not receive sufficient attention from them.
National trade unions congress
National Trade Union Centres are recognised by the Government of India for
being invited participation of the Indian Labour Conference which is a policy
making and consultative body. This is a tripartiate meeting of Trade

T E R I Report No. 2001EE42

The Indian minerals sector

36

Unions/Labour, Employers, and Government. The criteria for recognition as a

national trade union centre is.
A national centre should have at least five hundred thousand members
Minimum of five trades in their membership
Geographically these national centres should have membership in at least
five states of the Indian Union
These criteria and norms were accepted by the Indian Labour Conference and
presumed to be in force. Unfortunately a lot of information gap with regard to
policy attitudes and approaches makes it difficult to make any comment on
policies with some degree of certainty. The membership figures have always
been a mater of dispute for a variety of reasons and subject matter of court cases
against the Government of India, Ministry of Labour. There is therefore no
reliable membership data. Each trade union centre claims several times more
than what is published by government after verification done by the Labour
Ministry through its administrative network of Labour commissioners based in
the States of Indian Union. Two of the national trade unions centres UNTUC
and HMS are affiliated to International confederation of Free Trade Unions and
the Brussels based International Trade Union Centre. The AITUC and CITU
affiliated to recently revived World Federation of Trade Unions (WFTU) which
had collapsed after break up of Soviet Union and the erstwhile communist
countries of Eastern European countries out of the Soviet controlled system.

Dispute resolution
India has a comprehensive and highly developed system for the resolution of
both individual and collective employment disputes. The system is fully
comparable, in principle, with the best systems in Australia, the European
Union and the USA. The statutory basis is provided by the Industrial Disputes
Act, 1947. The key institutions are:
(a) Works Committees. These are consultative bodies set up at establishments
with not fewer than 100 employees, with equal representation of employer
and employees. This is the first stage of dispute resolution, and provides, in
practice, one of the most important and effective ways in which management
and unions work together to identify problems and avoid disputes;
(b) Conciliation Officers. These are Government appointees, either for a
specified area or a specified industry. Their function is to help to resolve
individual or collective disputes;

T E R I Report No. 2001EE42

The Indian minerals sector

37

(c) Boards of Conciliation. These are created on an as needed basis, by

notification in the Official Gazette, to promote settlement of particular
disputes. They are normally constituted with an independent chairman, plus
two or four members representing parties to the dispute;
(d) Courts of Enquiry. Again, these are set up on an as needed basis by
notification in the Official Gazette. Their function is to enquire into any
matter connected with an industrial dispute. They are constituted with one
or more independent persons, with one person to act as Chairman;
(e) Labour Courts. These are permanently established Courts specialising in the
adjudication of individual or collective disputes in the employment field.
They comprise a judicially qualified Presidential Officer, sitting alone. The
jurisdiction of Labour Courts is specified in the second schedule of the Act of
1947;
(f) Tribunals. Again, these are permanently established and have the task of
adjudicating industrial disputes covered by both the second and third
schedules of the Act of 1947, or such other matters as may be assigned to
them under the Act;
(g) National Tribunals. These are appointed by notice in the Official Gazette to
adjudicate industrial disputes involving questions of national importance, or
where industrial establishments in more than one state are likely to be
involved.
Effective arrangements for dispute resolution are, in any circumstances,
required to secure the orderly conduct of industrial relations. In periods of
change, however, their importance is magnified. Decentralisation of
responsibilities and decision making on labour issues will inevitably generate
disputes that, unless they are urgently addressed and promptly resolved, may
jeopardise the transition to liberalised labour markets in the sector.
The institutional framework for dispute resolution provided under the
Industrial Disputes Act, 1947 is sound and, as noted, stands comparison with the
best systems elsewhere. In operation, however, the system is not always
satisfactory. In particular, there are unacceptable delays in the disposal of
routine cases by Labour Courts.
Labour welfare fund for workers in unorganised sector
The concept of labour welfare fund has been evolved in order to extend or
measure of social assistance to workers in the unorganised sector. Separate
legislations have been enacted by Parliament to set up welfare funds to be

T E R I Report No. 2001EE42

The Indian minerals sector

38

administered by the Ministry of labour (GOI), to provide housing, medical care

social security, educational and recreational facilities to workers employed in
certain non-coal mines in the unorganised sector. The scheme of welfare funds
is outside the framework of specific employees and employer relationship in as
much as the resources are raised by the government on a non-contributory basis
and delivery of welfare services is effected without linkage to individual workers
contributions.
The Ministry of Labour (Labour welfare wing of labour welfare Division) is
responsible for the administration of these funds which have been set up under
the following Acts of Parliament:
The Mica Labour Welfare Fund Act 1946
The Limestone and Dolomite Mines Labour Welfare Fund Act 1972
The Iron Ore Managanese ore and Chromite Ore Mines Labour Welfare
Fund Act 1976
The welfare schemes formulated under the above enactments cover health
(Hospitals, ambulances, maternity benefit etc), housing (financial assistance to
mine management for contribution of low cost houses, integrated housing
scheme); education (financial assistance to children of mine workers, mid-day
meals etc). Recreation facilities and water supply (financial assistance for
sinking of wells and execution of water supply schemes). Finances for the funds
set up under the above enactments are raised through the levy of cess as detailed
below:
Iron ore Rs.1.00/tonne on export/internal consumption
Manganese ore Rs.2.00 / tonne on export/internal consumption
Chrome ore Rs.4.00/tonne on export/internal consumption
Limestone & dolomite Rs.1.00/tonne on internal consumption
Mica 4.5% ad-valorem on export.
Welfare funds have also been created for the welfare of different categories of
workers by the governments of Mahrashtra, Orissa, Madhya Pradesh, Goa and
Gujarat. The welfare funds which follow a sectoral approach are in addition to a
large number of poverty alleviation and employment generation programmes
like IRDP, IAY, JRY, EAS, EGS, TRYSEM, DWACRA, Tribal sub-plan, special
component programme for schedules castes etc. which follow a regional
approach and for which most of these workers are also eligible. The various Acts
as applicable to the organised sector workers in the unorganised sector, these
are:

T E R I Report No. 2001EE42

The Indian minerals sector

39

The Workmens Compensation Act 1923

Payment of Wages Act
Minimum Wages Act
Maternity Benefit Act
Payment of Gratuity Act
The Employees State Insurance Act

Bonded labour
The Government of India has consistently maintained a proactive approach to
the issue of forced or bonded labour in the country. It recognises this evil system
as a gross infringement of the fundamental Human Rights of the affected
citizens and is implacably committed to its total eradication in the shortest
possible time. India has ratified ILO Convention No.29 (Forced Labour
Convention 1930) on 30.11.1954. Following the ratification, the Bonded Labour
System (Abolition) Act, 1976 was passed by the Parliament. It freed unilaterally
all the bonded labourers from bondage with simultaneous liquidation of their
debts. The Act is being implemented by the State Governments. Since the
enactment of the Act, it is reported that as many as 2,80,411 bonded labourers
have been identified upto March 2001 in 13 states. Out of these, 2,56,825
bonded labourers have reportedly been rehabilitated by the respective state
governments under the central sponsored scheme (about Rs.600 million has
been provided by the Central Government).
Though much information is not available as to the extent of bonded labour
system in small mines operating in the country, it can be assumed that the
practice may be prevalent in a few states. All concerned state governments have
constituted vigilance committees at the district and sub-divisional levels for
taking suitable actions as per the Act, against employment of bonded labour.

Environmental legislation
The Constitution of India provides the necessary directives and powers to frame
and enforce environmental legislation. The Constitution classifies the various
legislative subjects into three categories, namely, Union List, State List and
Concurrent List. The legislation in respect of topics given in the Union List is
enacted by Parliament. Items included in the State List are enacted by the state
legislatures. The Concurrent List specifies the subjects that are to be looked
after jointly by the Centre and State governments. In the national interest and in
certain special circumstances, the Constitution enables Parliament to legislate
with respect to matters in the State List under Article 249 and 252. Under

T E R I Report No. 2001EE42

The Indian minerals sector

40

Article 253, the Parliament is empowered to legislate on all subjects of

international agreements to which India is a party.
The Indian concerns for environmental protection and improvement of
human environment may be considered to have started in earnest with the
participation of India in the UN conference on Human Environment held in
Stockholm in June, 1972. In order to implement the recommendation of this
conference, the Government of India enacted several Acts on environment. The
Water (Prevention and Control of Pollution) Act 1974 was promulgated under
Article 252, as water is a state subject. On the other hand, the Air (Prevention
and Control of Pollution) Act, 1981 and the Environment (Protection) Act 1986
were promulgated under Article 253.
The implementation of environmental legislation is a three-stage process for
the mining sector. There are environmental requirements associated with (a)
the initial application for the opening of the mine, (b) the operation of the mine
and (c) the closure of the mine. The application to open the mine requires an
assessment of impacts of the proposed activities on the existing environment
and submission of an environmental management plan for the operation and
closure of the mine. The environmental clearance for the mine, if granted,
stipulates any conditions, over and above the general requirements of the
environmental legislation, which may attach to the permission to operate the
mine.

Legal framework
There are five Acts, which with their associated Rules, Notifications, etc directly
applicable to the management of the environment. They are:
(a) The Water (Prevention and Control of Pollution) Act 1974
(b) The Water (Prevention and Control of Pollution) Cess Act 1977
(c) The Air (Prevention and Control of Pollution) Act 1981
(d) The Environment (Protection) Act 1986
(e) The Public Liability Insurance Act 1991
These environment specific laws must be read in conjunction with the Mineral
Concession Rules 1960 (MCR) that provide details of the data to be submitted to
the State authorities with respect to an application for a mining lease. The list of
requirements contains some references to environmental matters. The common
objectives of these pieces of environmental legislation are as follows:
(a) To arrest further damage to the environment and ecosystem resulting from
mining.

T E R I Report No. 2001EE42

The Indian minerals sector

41

(b) To take positive steps towards conservation of the environment.

(c) To take measures to restore the environment in areas damaged including
such measures as reclamation of degraded land.
(d) To create authorities to administer the policy and contents of the legislation.
(e) To provide penalties and prosecution for violation of laws.
The Environment (Protection) Act; 1986 including Rules 1986
In 1986, the Union Government enacted the Environment (Protection) Act
(EPA) with a view to rectifying omissions in the legislative coverage, which until
then had been done on sectoral basis. The EPA, like the Air Act preceding it,
invokes for its source of authority, the Stockholm Declaration of 1972, placing it
thereby in the Constitutional setting of Article 253. The EPA consequently
extends to the whole of India. The Central Government is empowered by the
EPA to take all such measures as it deems necessary or expedient for the
purpose of protecting and improving the quality of the environment, and
preventing, controlling and abating environmental pollution. A number of
notifications have been issued under the EPA. Some of the important
notifications/amendments, which affect mining projects, are as follows:
(a) Restriction on mining in certain identified ecologically sensitive/fragile areas
(e.g. in Wild life Sanctuaries, National Parks, and adjoining National
Monuments, areas of cultural heritage, ecologically fragile areas, areas rich
in biological diversity, genepool, etc).
(b) Environmental Impact Assessment (EIA) for development projects (1994).
(c) Amendment to the EIA notification making Public Hearing mandatory for
development projects (1997).
(d) National ambient air quality standards for industrial, residential, rural and
sensitive areas.
(e) General standards for discharge of effluents from mining and mineral
processing activities.
(f) Ambient air quality standards in respect of noise for industrial, commercial,
residential areas and silence zones.
Mineral Concession Rules, 1960
Mineral Concession Rules (MCR) stipulate that the mining plan shall
incorporate a plan of the area showing the water courses, the limits of reserved
and other forest areas, the density of trees, an assessment of impact of mining
activity on forest land surface and environment including air and water
pollution, details of scheme of restoration of the area by afforestation, land

T E R I Report No. 2001EE42

The Indian minerals sector

42

reclamation, the use of pollution control devices and such measures as may be
directed by the Central or the State Government from time to time. All these
requirements are incorporated in an Environmental Management Plan (EMP),
which forms an integral part of a mining plan.

Forests
Introduction
The Indian Forest Act, 1927 enacted during the British rule, aimed to
consolidate the law relating to forests, the transit of forest produce and the duty
leviable on timber and other forest produce. This Act deals with reserved
forests, protected forests, village forest and control over non-government
forests. It gives a comprehensive definition of forest produce. Section 26 (1)
lists acts prohibited in reserved forests, which includes clearing or breaking any
land for any purpose.
After independence, a Forest Policy was formulated in 1952, which aimed at
a forest coverage of one third of the total land area of the country. In spite of the
policy, extensive diversion of forest land for non-forest purposes took place over
the years. Based on available information, the total forest area diverted for nonforestry purposes between 1950 and 1980 was 4.5 million ha. i.e. at an annual
rate of 0.15 million ha. In order to regulate the unabated diversion, the
Constitution was amended in 1976 (Forty Second Amendment) which inscribed
Forests under a new item 17A in the Concurrent list of the Seventh Schedule to
the constitution. Subsequently the Forest (Conservation) Act was enacted in
1980 as a long felt measure to protect and conserve forests. These measures
resulted in considerable reduction of diversion of forest area for non-forestry
purposes.
Policy and legislation
The major Acts and their rules, guidelines, and policies which directly apply to
the management of the Forests and Wildlife are:
(a) Indian Forest Act, 1927
(b) Wildlife Protection Act 1972 (as amended up to 1991) with its many Rules.
(c) Forest (Conservation) Act 1980
(d) Forest (Conservation) Rules 1981
(e) Environment (Protection) Act 1986 and Rules (Discussed under the
Environment Section).
(f) National Forest Policy 1988

T E R I Report No. 2001EE42

The Indian minerals sector

43

In addition the Supreme Court has taken several decisions which have a bearing
on forestry and wildlife matters.
Forest (Conservation) Act 1980 and Rules 1981
The Forest (Conservation) Act 1980 (FCA) provides an adequate structure for
the preservation of the forest resources of India. The FCA seeks to restrict the
powers of State Governments in respect of dereservation of forests and use of
forest lands for non-forest purposes. To this end, it has created an Advisory
Committee in the Ministry of Environment and Forests (MoEF), Government of
India, to oversee the implementation of the statute.
Wildlife Protection Act 1972 (amended up to 1991)
The Act as amended up to 1991 prescribes protection of animals and regulates
their improvement. The Act is very rigid and is supported by various Supreme
Court decisions. It is difficult to obtain diversion of forest rich in wildlife, or
coming in the pathway of wild animals etc. In case of sanctuaries and National
Park, diversion is not generally allowed unless the project is of national
importance and no other alternative is available. In such cases the no objection
has to be initially accorded by the Indian Board of Wildlife and the State
Legislature before consideration by MoEF for diversion.
The National Forest Policy 1988
The National Forest Policy 1988 has given greater emphasis to the conservation
and ecological aspects of forest, wildlife, and environment. The salient features
of the new Forest Policy are:
(a) Maintenance of environmental stability through preservation and
restoration of ecological balance.
(b) Conservation of the natural heritage of the country by preserving the
remaining natural forests and protecting the vast genetic resources for the
benefit of posterity.
(c) Meeting the basic needs of the people, especially fuelwood, fodder and small
timber for the rural and the tribal people.
(d) Maintaining the intrinsic relationship between forests and the tribal and
other poor people living in and around forests by protecting their customary
rights and concession on the forests.

T E R I Report No. 2001EE42

The Indian minerals sector

44

Diversion of Forest Land

Mining including underground mining is a non-forestry activity. Therefore,
prior approval of the Central Government is essential before a mining lease is
granted in any forest area. The FCA applies not only to the surface area, which
is used in mining but also the entire underground mining area beneath the
forest.
No mining activity is permitted in National Parks and Wildlife Sanctuaries.
All proposals involving forest land more than 20 ha. in plains and more than 5
ha in hills must be accompanied by a cost-benefit analysis to determine whether
diversion of the forest land for non-forestry use is in the overall public interest.
The parameters according to which the cost aspect will be determined and the
parameters for assessing the benefits accruing are given in MoEF document. If
the project involves displacement of people, a detailed rehabilitation plan shall
be submitted along with the proposal. The SC and ST population should be
separately considered and a plan for their rehabilitation should be in cognisance
with their socio-economic, cultural lifestyle.
Compensatory afforestation
Compensatory afforestation is one of the most important conditions stipulated
by the Central Government while approving proposals of dereservation or
diversion of forest land for non-forest uses. Compensatory afforestation must be
done over equivalent area of non-forest land. This land should be close to
reserved forest or protected forest to enable the forest department to effectively
manage the newly planted area. The identified non-forest land has to be
transferred to the ownership of the State Forest department and declared as
Protected Forests so that the plantation raised can be maintained permanently.
The transfer must take place prior to the commencement of the project.

Resettlement and rehabilitation of project affected population

Background and approach
A major challenge confronting any investor in India, where project
implementation involves involuntary displacement of people, is the equitable
and effective resolution of R & R issues.
Inevitably, the issues are acute in a country of one billion people and with
one of the highest population densities in the world; where 70% of the
population subsist on agriculture and 36% are below the poverty line; and where
an illiteracy rate of 52% forecloses access to skilled or knowledge jobs. These
factors are experienced most severely in the mining areas which, for the most

T E R I Report No. 2001EE42

The Indian minerals sector

45

part, are located in isolated and less developed regions of the country,
predominantly inhabited by Scheduled Castes and Scheduled Tribes, and by
other economically weak and disadvantaged sections of society. The problem is
compounded by growing reliance on opencast mining, requiring increased areas
of land and entailing large-scale displacement of project affected people (PAPs).
Legislation and policy
There is no legislation at the Central Government level on R & R. In 1993, GOI
prepared the first draft of a national policy setting out compensation packages
and guidelines for R & R. Following widespread consultation within
government, however, the draft is still under consideration.
Some States, namely Madhya Pradesh, Maharashtra and Karnataka, have
enacted legislation for R & R. Others, including Gujarat and Orissa, have
adopted formal R & R policies. Similarly, some PSEs have formally adopted R &
R policies. Notable among these is Coal India Limited (CIL), who have a
comprehensive R & R policy document.
Compensation for land, houses and other structures is determined by the
provisions of any of the following Acts, depending upon the law applied for
acquisition:
(a) The Land Acquisition Act, 1894 (LAA);
(b) The Coal Bearing Areas ( Acquisition and Development) Act, 1957
(CBAADA);
(c) Relevant State laws.

Fiscal regime
Indian companies are taxed in India for their income anywhere in the world.
Foreign companies are taxed in India for their income which arises from
operations in India. This includes royalty, fees for technical services, interest,
and gains from sales of capital assets situated in India and dividends from
Indian companies. Indirect taxes are also required to be paid which include
excise duties, custom duties, sales tax and others such as octroi, real estate tax,
etc. Under the Mines and Minerals (Development and Regulation) Act, 1957,
prospecting fee, surface rent, dead rent and royalty is required to be paid.
The Government of India offers a wide range of concessions to investors in India
engaged in mining sector. A few of the concessions are as follows:
Tax holiday: Mining companies operating in backward areas are entitled to
tax holiday for the initial period of five years from commencement of
production and a partial tax holiday thereafter.

T E R I Report No. 2001EE42

The Indian minerals sector

46

Incentive for new venture: Newly established mining companies are eligible
for a deduction of 30 per cent of gross total income for 10 years subject to
certain conditions. However, such incentives will not be available in case the
benefit of tax holiday is availed.
Depriciation allowance: The benefits of accelerated depreciation are
available for tax purposes. As a result, the total amount of depreciation
which is allowable as a tax deduction does not change but the company is
allowed to make such deduction earlier in projects life.
Deduction in respect of export turnover: Deduction of 100 per cent export
income is granted for export of specified processed minerals and ores. To
claim this deduction, the sale proceeds of exports must be brought into India
in convertible foreign exchange within a specified time period.
Expenditure on prospecting, extraction and production of minerals: The
expenditure incurred by an Indian company engaged in any operation
relating to prospecting for, or extraction or production of any mineral during
the five year period ending with the year of commercial production is
allowed as a deduction from the total income to the extent of one-tenth of
the amount of such expenditure. No deduction shall be allowed on the
expenditure on the acquisition of site and other capital expenses on which
depreciation is claimed.
Expenditure on scientific research: Capital and revenue expenditure
incurred by the assessee who himself carries on scientific research is allowed
as a permissible deduction. A weighted deduction of 125 per cent is allowed
for payments made to specified universities and laboratories for carrying out
scientific research.
Expenditure on know-how: Any lump sum paid for acquiring know-how is
deductible in six equal instalments in a period of six years.
Preliminary expenditure: Preliminary expenses incurred by an Indian
company before the commencement of business are allowed as a deduction
in ten equal instalments.
Expenses for environmental protection: Amounts paid to approved
association or institutions for programs of conserving natural resources are
allowed as a deduction in the computation of taxable income.
Tax treaties
The tax treaties signed by India are based generally on United Nation practices.
India has signed treaties with a large number of countries for avoidance of
double taxation of income. This has resulted in relatively lower tax cost for

T E R I Report No. 2001EE42

The Indian minerals sector

47

foreign companies doing business in India. Some of the countries with which
such treaties have been signed include Australia, Austria, Bangladesh, Belgium,
Germany, Greece, Hungary, Nepal, Netherlands, New Zealand, Norway, Syria,
Tanzania, Thailand, etc.
In the absence of tax treaties, even with the tax holidays it is not necessary
that the investor will have the benefit, as the party is still taxed in its own
country. It is also seen that the tax holiday is for a limited period whereas the
project is for a long period. In case, the prices of minerals are low, the eventual
taxation even with holiday in the initial period can make the project unviable.
Foreign investment
Being aware of the vast potential of the mineral sector, the Indian Government,
has been consistently and in a pragmatic manner opening up the previously
controlled regime to usher private investment in the sector and infuse funds,
technology and managerial expertise. The opening up of the Indian mining
sector has, therefore, generated considerable global interest. The Indian mining
sector was opened up to Foreign Direct Investment in 1993 after the
announcement of the New Mineral Policy. Initially, all proposals were
considered on a case to case basis by the Foreign Investment Promotion Board
(FIPB). FDI policy in the mining sector was further liberalised in January 1997
which opened up an automatic approval route for investments involving
foreign equity participation upto 50% in mining projects, and upto 74% in
services incidental to mining.
The above sectoral guidelines in the mining sector were reviewed by the
Department of Mines and the following changes in the sectoral caps have been
made with effect from 11th February 2000 towards further liberalisation of the
mining sector.
There will henceforth be no difference in the caps on foreign equity holdings
to be allowed at the stages of exploration and that of mining;
For all minerals with which the Department of Mines is concerned other
than diamonds & precious stones, foreign equity holding upto 100% will be
allowed on the automatic route, for both exploration and mining.
In case of diamonds & precious stones, foreign equity upto 74% will be
allowed on the automatic route for both exploration and mining operations.
For proposals seeking higher than 74% foreign equity, the cases will have to
come to FIPB for clearance.
Foreign equity upto 100% will be allowed on the automatic route for
processing of minerals and metallurgy.

T E R I Report No. 2001EE42

The Indian minerals sector

48

There will be no requirement of NOC from an existing joint venture partner

for fresh investments. The prospective investor will only have to give a
declaration that he has no existing joint venture for the same area and/or the
particular mineral.
Coal and lignite
Private Indian companies setting up or operating power projects as well as
coal or lignite mines for captive consumption are allowed FDI up to 100%.
100% FDI is allowed for setting up coal washeries, subject to the condition
that the company shall not do coal mining and shall not sell washed coal or
sized coal from washeries in the open market.
FDI up to 74% is allowed for exploration or mining of coal or lignite for
captive consumption.
In all the above cases, FDI is allowed up to 50% under the automatic route
subject to the condition that such investment shall not exceed 49% of the
equity of a PSU.

2.6 Small scale mining sector

What is small scale mining?
Small scale mining is carried out in all countries (both developed and
developing) and it is estimated that it contributes as much as 15% of the global
value of mineral production. Indian mining industry also operates a number of
small mines spread throughout the country. Many attempts have been made by
researchers in the last three decades to define small scale mining and a number
of arbitrary definitions have evolved. These definitions may be categorised into
two distinct groups, one uses the mine production as the only yardstick and the
other treats the mineral produced by the mine being its marketable output.
However, none of these approaches are complete in itself. In India a Committee
on Small Mines was set up in 1986 by Mining Geological and Metallurgical
Institute of India (MGMI). According to this committee, a small mine is one in
which the raw ore production does not exceeds a certain limit depending on the
mineral/ore; the investment will not exceed Rs.6 million; and if benefication /
processing plants are installed the investment may not exceed Rs.10 million.
According to the International Labour Organisation (ILO) the small scale
mining falls into two broad based categories. The first is the mining and
quarrying of industrial minerals and construction materials on a small scale.
These operations are mostly for local markets and they exist in every country.
Regulations to control and tax them are often in place. Informal or illegal

T E R I Report No. 2001EE42

49

The Indian minerals sector

operations at this level are generally due to a lack of inspection and the lax
enforcement of regulations rather than to the lack of a legal framework, much
the same as for small manufacturing plants. The second category is the mining
of relatively high-value minerals, notably gold and precious stones.

Small scale mining in India

The definition of small scale mining operations is highly country specific. A mine
which comes under the category of small mines in one country may not be
considered so in another country. The definition also depends on a number of
factors such as persons employed, bulk and value relationship of mineral, size of
the mining lease, size of mineral reserve in that lease, production capacity,
labour productivity etc., individually or a combination of any of these factors.
Therefore, if a small mine is taken as that operation which is defined by the
absence of the regular use of deep blast hole drills, large scale blasting and heavy
earth moving equipment with employment of manpower limited to 150 persons
underground and 400 overall, then about 95 per cent of mines in India will
come in to the category of small mining operations. Out of the 4 fuel, 11 metallic
and 49 non metallic industrial minerals, as many as 36 are mined exclusively by
small scale sector and another 14 are mined partly by small scale and partly by
medium scale operations. Valuewise about 20 per cent of the total production is
contributed by small mining operations. Of this figure, 15 per cent comes from
major minerals and 5 per cent from minor minerals. Small size operations seem
to be more common in the private sector.
The present size of mining operations (productionwise) can be gauged from
the aggregate production of minerals and the number of operating mines in
respect of 20 minerals which are fairly representative of the non fuel mineral
profile. It will be seen that the average size of mining operations in respect of
copper, lead and zinc is much more than other minerals (Table 13). However,
these minerals do have small mining operations, which is indicated by the
production levels at a number of mines (Agnigundala, Ingaldhal, Kalyadi,
Mailaram., Dariba and Bhotang).
Table 13 Average size of mining operation for some minerals
S.No.

Mineral

Production

Number of

Annual production per mine

(thousand tonnes)

mines

(thousand tonnes)

Apatite

12

Asbestos

19

37

0.51

Barytes

363

11

33

Bauxite

7050

180

39

T E R I Report No. 2001EE42

50

The Indian minerals sector

5

Chromite

Copper ore

Dolomite

Fire clay

Gold ore

1738

21

83

3085

10

309

2815

111

25

400

96

4.2

570

71

10

Gypsum

3247

44

74

11

Iron ore

74946

214

350

806

154

5.2

12

Kaolin

13

Kyanite

14

Lead-zinc

2755

344

15

Limestone

128787

527

244

16

Magnesite

326

16

20

17

Manganese ore

1586

133

12

18

Silica sand

1558

154

10

19

Sillimanite

15

3.75

20

Steatite

557

153

3.6

Small scale mines are situated mostly in underdeveloped areas, quite a few
operate in clusters and some of them are artisanal. A large number of them are
tackling small mineral deposits of ores which may not be amenable to largescale operations. Such minerals are: apatite, asbestos andalucite, baryte,
bauxite, bentonite, china clay, chromite, flespar fireclay, graphite, magnetite,
mica, ochres, soap stone, quartz, garnet, varieties of rare earths, iron ore,
manganese, zinc, fluospar, phosphate, magnesite, granite, marble slate,
limestone, etc. In view of the low tenor of ores and small size of some deposits,
small scale mining is of great relevance. To make them cost-and-qualitycompetitive, induction of latest but flexible technology can be great value. At
present, however, out-dated technology, higher costs of production and poorer
quality of products is major handicaps.

Advantages of small scale mining

The small-scale mining sector has certain advantages which are very much
pertinent to the Indian socio-economic structure. These are:
Small mining operations have high employment potential for workers of all
types skilled, semiskilled or unskilled, even in remote rural areas. About
one and half decade back 50% of Indian mining workforce was engaged in
small mines (Argall, 1976). A recent estimate indicates that around 0.5
million workers in this country are employed by this sector (Berger &
Carman, 1990).
Small mining may also fit in well in the Indian social structure, especially if
seasonal operations are required because of the cultivation in the same area.

T E R I Report No. 2001EE42

The Indian minerals sector

51

The above two factors may collectively act as a restraint to rural population
on urban migration.
Developments of small mines are accomplished more rapidly and at a
fraction of the cost of large mining ventures.
Small scale mines sometimes form the basis for local processing and
manufacturing industries either on small or cottage scale, or as feeders to
large centralised plants, thus help the socio economic growth of their
surroundings.
Small mining activities respond readily to alterations in economic balance
caused by changes in mineral price and provide greater stability to product
cost.
Exploitation being low, exploration success in these mines is usually greater
than in larger ventures. Small operations sometimes lead to the recognition
of major deposits.

Some serious shortcomings

Less-than-subsistence wages, appalling working conditions and disregard to
safety and health are very common.
Environmental protection is seldom more than rudimentary: Inappropriate
technology, lack of consciousness towards mineral conservation, and
inadequate financial support often lead to disorganised and wasteful
exploitation of mineral deposits.
Sometimes knowledge and enforcement of statutes are totally missing.
This sector in India is mainly run by private entrepreneurs.
Sometimes, due to remoteness of the locations of small mines and gaps in
communication, many of them, specially those of minor minerals, are worked
beyond the knowledge of law enforcing authorities like the Directorate General
of Mines Safety (DGMS). Neither the mine management, nor even the
concerned government departments are duly aware of the statutes concerned
with mining activities. As a result, these mines are often worked in unsafe and
unscientific fashion.

Cluster mining
The concept of small scale cluster mining as a means of sustained employment
and eco-friendly mining operation is gradually attracting attention all over the
world. But the problem of development of such clusters are so diverse (both
technical and socio-economic) that each country needs an in-depth study in each

T E R I Report No. 2001EE42

The Indian minerals sector

52

case. In India, the cluster concept has been experimented in Pachami-Hatgacha

(in the State of West Bengal) stone mining activities. It is reported (by NISM)
that in the cluster the employment has increased from about 200 to 10,000 in a
period of two decades, providing minimum sustenance to a large number of
people.
There are two categories of cluster-mining: I) developed naturally in the
course of decades of operation and ii) pre-planned and executed under same
authority fairly quickly. By way of example, Pakur Stone mining in Bihar,
Makrana Marble mining in Rajasthan and Naini Glass Sand mining in Uttar
Pradesh can be classified under the first category and Pachami-Hatgacha Stone
mining in Birbhum in West Bengal and, in a way, Panna Diamond mining under
the second category.
Naturally developed cluster-mining takes a long time to develop and gives
rise to employment in a slow and halting manner. This happens as and when the
number of mines and production gradually increase some-times with erratically
growing market demand and slow development of infrastructural facilities. In
such clusters proper and timely geological investigations and scientific analyses
and studies are not carried on in time, leaving the entire operation to hit-andmiss technology except in a few isolated cases of enlightened individuals.
But in the case of preplanned clusters all the necessary preliminary
investigations are made and the entrepreneurs helped and guided to carry on
operations in an enlightened manner. Thus the development is much quicker on
a sure footing leading to production and employment. Moreover, in such cases,
chances of introduction of more effective mining methods and better technology
(intermediate) is easier and the entrepreneurs are more receptive to suggestions
and advice. This was realised during two NISM organised Workshops (1995) on
motivating small mine owners for eco-friendly mining operations. But
unfortunately, in most of these areas the total advantage of cluster mining can
not be harvested for want of adequate follow up and supportive actions by many
of the government authorities who are more interested in collecting royalty
income than in improving mining activities consistent with safety and protection
of environment. They are not much interested in gradually modernising mining
and processing practices which not only improve labour wages but also
government revenue income.

Future scenario
Small scale mining provides employment, income and foreign exchange to the
country. It enables resources to be developed which otherwise non-economic

T E R I Report No. 2001EE42

The Indian minerals sector

53

and it helps to avoid rural-urban migration. It maintains the link between

people and the land. Looking at the significance of the small operations in the
mining sector, it is advocated that this sector should be extended all support.
Small scale mining needs to be given full recognition for its contribution to
national wealth and employment and should receive proper consideration when
policies and regulations are developed and implemented. A national policy on
Small Scale mining may be formulated covering the following aspects.
Establishment of a statutory definition for Small Scale Mines in India,
(surface and underground operations being defined separately) using
-

rate of mineral production and overburden removal for surface workings,

and production rate and depth of working for underground operations.
In addition level of investment, employment, value of the minerals etc.
should also be considered.

Execution of elaborate human resource development programme to develop

awareness in this sector regarding
-

safety and health

appropriate technology

environment, and

statutes

Improvement of the statutory monitoring to ensure safe and scientific

mining
Provision of financial assistance to small mines for adoption of environment
control measures
Provision of technical support in exploration, planning and quality control

2.7 Community issues

Community and land
Background
After independence, the country embarked upon development based on large
projects and by industries which required widespread displacement of
population. A conservative estimate of the number of people displaced due to
planned development from 1950 to 1991 is about 21.3 million on account of
construction of dams, mining projects, wildlife sanctuaries and industries. More
than 40% of the displaced population was tribal. In the mining sector the
persons displaced is estimated at 2.5 million of which more than 50% were
tribals. Only about 25% of these have been rehabilitated (NCAS: Issue No.3,
1999). This gave an idea of the magnitude of the land acquisition problem in
mining areas.

T E R I Report No. 2001EE42

54

The Indian minerals sector

The land is acquired under the Land Acquisition Act 1894 and also for
coalmines under the Coal Bearing Areas (Acquisition & Development) Act, 1956.
The Land Acquisition Act was first passed in 1894 by the British to acquire land
for Public works such as making roads, rail roads, salt mines etc. The Act was
silent on the issue of rehabilitation of displaced people and communities. The
process of land acquisition accelerated after the formulation and
implementation of first Five Year Plan in 1951. Large tracts of land were
acquired for public sector and defence projects. The involuntarily displaced
persons were given meagre compensation and were left to find out ways for their
rehabilitation.
The Act was amended substantially in 1984 to streamline the process of
acquisition. The salient features of 1984 Land Acquisition Act are:
Land can be acquired by the Government for the private sector.
A time limit of three years, between the first notification under Section 4.1
and the issue of the declaration of intended acquisition under Section 6. No
such limit existed till then.
It also set the time limit within which the Collector must make his award.
The Urgency Clause (Section 17) was introduced to enable the State to
dispense with Section 5 (A) under which the affected party can file objections
to the proposed acquisition.
But the Land Acquisition Act gave very little scope to the affected party to
challenge the process of acquisition or even to demand fair compensation and
rehabilitation (Dhagumwar 1997). Peoples impoverishment and marginalisation
were its consequences (NCAS).
India has a total geographical area of 329 million ha (reporting area is 305
mha). The land use statistics for 1990-91 is as follows:
Forests

68

Area not available for cultivation

41

Other uncultivated land

31

Fallow land

23

Net copper area

142

Total

305

The area covered by mining leases for non-coal mines is about 0.7 million ha
and for coal it is estimated at 0.36 mha. Hence the total area under mining lease

T E R I Report No. 2001EE42

The Indian minerals sector

55

is slightly over 1 million ha which is about 0.3% of the total land area in the
country.
Rehabilitation and resettlement of displaced population
The Central Government does not have any rehabilitation and resettlement
policy. However, some State Governments and other agencies (public sector)
formulated rehabilitation policies. The Governments of Mahrashtra, Madhya
Pradesh and Karnataka have enacted laws for the rehabilitation and
resettlement of project affected persons.
In 1994 the Government of India formulated the draft National Policy for
development induced Displacement and Rehabilitation of persons displaced as a
consequence of acquisition of land. It was mentioned in the introduction to the
draft that, with the advent of the New Economic Policy, it was expected that
there will be more demand for land leading to more displacement. It was,
therefore, necessary to formulate a proper rehabilitation policy. This draft was
widely discussed amongst the voluntary organizations and a citizens draft was
formulated as an alternative. (Fernandes Walter and Paranjpe Vijay (Eds),
Rehabilitation Policy and Law in India: A right to Livelihood, Indian Social
Institute, New Delhi and Econet, Pune, 1997). However, since the Government
did not present the R&R policy statement to the Parliament, the debate was not
pursued.
In 1998, the Ministry of Rural Development prepared a draft Land
Acquisition (Amendment) Bill. It was learnt that the Union Cabinet approved
the LA (Amendment) Bill, but deferred the draft of the National Rehabilitation
and Resettlement Policy for Displaced Persons prepared in 1994.
This move by the government was stalled by peoples organisations, social
activists, lawyers and concerned citizens who made hue and cry about the bill.
As a result, the Ministry of rural Development was forced to convene a meeting
of the experts, activists working with the displaced people and government
officials on 21st January 1999. In the meeting the concept of eminent domain
(the right of the State to its property is absolute) and public purpose (includes
industrial estates, private national and multinational corporations) were
challenged. The issue of peoples rights (fishing rights, water rights etc.), their
participation and proper rehabilitation were discussed. The ministry agreed to
the suggestion of preparation of an alternate draft amendment and policy
statement by voluntary organisations.

T E R I Report No. 2001EE42

The Indian minerals sector

56

The land Acquisition, Rehabilitation and Resettlement Bill, 2000 (prepared by

voluntary organisations)
Various consultations and meetings were held in different parts of the country
by peoples organisations, and an alternate draft called The Land Acquisition,
Rehabilitation and Resettlement Bill, 2000 was prepared collectively by
integrating both the Land Acquisition Bill and the R&R Policy. Salient features
of the draft bill prepared by voluntary organisations are as follows:
The process of land acquisition is made justifiable by including provisions
for rehabilitation and resettlement in the draft;
The doctrine of eminent domain is replaced by Principle of Tursteeship
where government is a trustee of the property and has a moral and legal
responsibility to justify that the acquisition is for the welfare of the people;
The concept of public purpose has been defined where acquisition of land for
private companies that work for profit can not be public purpose;
The term project affected person is defined to include displaced persons,
partially displaced persons and other affected persons deprived of livelihood
resources (rural artisans, traders, collectors of non wood forest produce,
etc.);
Detailed provision about the publication of notices and notifications under
different sections of the draft 6, 12, 16, 17, 25 and 51 is laid down for the
benefit of the concerned persons;
Provision is made for getting information at different stages regarding the
nature of the project, cost/benefit analysis, extent of acquisition and
displacement to raise objections;
Government will approve the project only after obtaining consent of the
gram sabha. The gram sabha has the right to give or withhold its consent. In
case of schedules areas, by following the Panchayat (Extension to Scheduled
areas) Act, the gram sabha will be deemed to be concerned even if one
household from the area of the gram panchayat is affected;
Adult members includes both men and women of the household. The
allotted lands to be in the joint names of the husband and wife. In any public
hearing on the project related matters, 50% of the participants should be
women;
The amount of the solatium will be equal to the value of compensation
awarded i.e. 100%. If persons and households are displaced for second time
within a period of 30 years an additional amount of solatium will be paid;

T E R I Report No. 2001EE42

The Indian minerals sector

57

The state Land Acquisition and R&R Commission will monitor the
implementation of the Act. The persons displaced before the commencement
of this Act shall also get some relief;
Provision for special officer for the collection of data on displacement since
independence at state as well at national level;
National Land Acquisition and R&R Commission to deal with households
displaced in two or more states;
The process of land acquisition to be completed within 18 months of the
notification of the intention of acquisition. If the land is not acquired within
stipulated time the notification is deemed to be invalid. If the land is to be
acquired again the entire procedure will have to be repeated;
Land acquired for specific purpose cannot be utilised for another purpose;
Displacement shall not take place unless the compensation and solatium is
paid, an alternate land is allotted, and R&R process is completed.

Community change and transformation

Introduction
In a populous country like India, the mining industry plays an important role in
meeting the raw material need for industrial growth and attaining a degree of
self reliance particularly in the core sector such as iron and steel, power, cement,
crude refining, fertilizer and other essential commodities. The importance of
mining to the development of the industrial sector is indisputable and would call
for both mineral development and mining at an ever increasing rate to support
the core sector. Such large scale industrial activity is bound to have adverse
effects in the form of land degradation, generation of solid, liquid and gaseous
pollutants, destabilisation of the eco-system and communities. In the Indian
scenario in the 1970s and 1980s there was almost a total disregard and
insensitivity (largely borne out of ignorance of the consequences of these
neglects) to the needs for environmental protection and community welfare. In
the late 1980s and 1990s, due to stringent environmental regulations and
community upheavals, the concern for remedial measures were manifest in
many companies (both public and private) policies which resulted in some
concrete actions.
The efforts of these companies in environmental protection and welfare of its
employees have been commendable. A case in point is the coal industry where,
after nationalisation of the coal mines in 1971-73, the workers remuneration,
welfare amenities improved considerably. Dignity of labour was established and
they contributed significantly to the growth of the industry. This led to creation

T E R I Report No. 2001EE42

The Indian minerals sector

58

of islands of prosperity in many of the mining areas like Singrauli, Kudremukh,

Bailadila, Khetrs, Malanj Khand, Noamundi, etc. Local communities benefited
in terms of employment, hygiene, health, education development of roads, water
supply etc. The spin-off effects of mining and mineral industry were the
development of ancillary small scale and cottage industries. However, there are
many other companies which continue to be insensitive to the consequences of
mining on environment and communities.
Campaign against unjust mining
The relationship between mining companies and communities has been
characterised by the fact that the local communities are seldom consulted, their
needs and concerns are only marginally satisfied and they are rarely involved in
the decision-making processes. The result has been a relationship in which
confrontations, tensions and conflict have been predominant. Campaign against
unjust mining by peoples organisations and social action groups emerged as a
support to the struggles of the local communities for peoples right over natural
resources. Issues brought out were displacement, human rights violations,
environmental degradation and health hazards. The livelihood systems of
Adivasi communities and rural poor are increasingly being taken away by huge
mining operations in Bihar, Madhya Pradesh, Orissa, Goa, Mahrashtra, Andhra
Pradesh and other states. These social groups are also critical of the role of
World Banks policy in the coal sector in India. The World Bank provides
technical assistance to member countries on the legal framework, geographic
information systems (GIS), environmental regulation, modernisation technique
etc. Paradoxically the bank is also involved in suggesting ways to mitigate the
socio-economic and cultural impacts of mining. Still, all the major WB funded
mining projects suffer the most from the socio economic problems. In 1997, G.
Nankuri, A WB researcher states people living closest to mines have suffered
most and usually benefited least. The mineral dependent developing countries
actually had slower rates of economic growth, lower level of social welfare and
higher disparity between rich and poor when compared to developing countries
less reliant on mining. Brief details of some of the campaigns by social action
groups in Orissa, Andhra Pradesh and Bihar are described in following
paragraphs and are also given in Annexure 8. A list of Non-Governmental
Organisations (NGOs) working for cause of environment and social justice is
given Annexure 9.

T E R I Report No. 2001EE42

The Indian minerals sector

59

Bauxite mining
Large deposits of bauxite has been discovered along the East-Coast in the States
of Orissa and Andhra Pradesh. NALCO is operating one of the deposits in
Orissa. In addition many large private sector companies and small and medium
size companies have acquired leases for vast areas of land in Rayagada,
Kalahandi and Koraput districts in Orissa for bauxite mining. Most of these
deposits fall in forest areas inhabited by tribals. The social action groups have
started a campaign on issues related to: displacement, right to information,
human rights and right to common property resources and a clean environment.
Andhra Pradesh has a huge deposit of bauxite around 700 million tonnes. To
have an access to these bauxite deposits around 25 major tribals villages have to
be displaced, around 10,000 trees have to be pulled out, and the state will lose
around Rs. 1520 crores in terms of environmental degradation like soil erosion,
etc. The local NGO, SAMATA filed a plea in the Executive Magistrates Court at
divisional level for restoration of tribals rights over land stating that no
Government is above the Constitution, and thus tribals cannot be alienated in
Scheduled Area as referred to in Fifth Schedule of the Indian Constitution.
SAMATA also challenged laws such as the LA Act, Forest (Conservation) Act,
etc. The Divisional Court and the Apex Court supported tribal rights, and after a
battle of two and a half years the full bench of the Supreme Court in a Special
Leave Petition, No. 17080-81 of 1995 made a historical judgement in favour of
tribals. The Judgement stated:
a) Government lands, forest lands and tribal lands in the scheduled area cannot
be leased out to non tribals or private industries:
b) Government cannot lease out lands in scheduled areas for mining operations
to non tribals as it is in contradiction of the Fifth Schedule for the
constitution;
c) Mining activity in scheduled areas can be taken up only by Andhra Pradesh
State Mineral Development Corporation or a co-operative of tribals and that
if they are in compliance with the Forest Conservation Act and the
Environment Protection Act.
d) The court recognized the 73rd Constitutional Amendments Act and the A.P
Panchayat Raj (Extension of Scheduled Areas) Act by stating that the gram
sabha shall be competent to safeguard and preserve community resources
and thereby reiterated the need to give the right of self governance to triabls.
e) If necessary, the court felt the Chief Secretary of A.P state should constitute a
committee consisting of himself, Secretary (Industry), Secretary (forest),
Secretary (social Welfare) to have the factual information collected and

T E R I Report No. 2001EE42

The Indian minerals sector

60

considered whether it is feasible to permit the industry to carry on mining

operations. The committee consisting of Ministers for Industries, forest and
Tribal welfare to examine the issue whether licenses could be allowed to
continue or whether expedients to prohibit further mining operations.
f) In case where the similar Acts in other states do not totally prohibit grant of
mining lease of the lands in the Scheduled area, similar committee of
secretaries and State Cabinet sub committees, should be constituted and
decision taken thereafter. Before granting lease, it would be obliged for the
state government to obtain concurrence of the Central Govt. by constituting
a sub-committee headed by the Prime Minister and other Union Ministers.
g) The court also felt that it would be appropriate to constitute a conference of
Chief Ministers and concerned union ministers to take a policy decision so as
to bring about a suitable enactment for a consistent scheme throughout the
country in respect of the tribal lands and exploitation of mineral wealth.
h) The state government was therefore, directed to stop all industries from
mining operation.
i) The court opinioned that since the Executive is enjoined to protect social,
economical and educational interest of the tribals, when the State leases out
the lands in the scheduled areas to non-tribals or industries for exploitation
of mineral resources, it transmits the corrective above Constitutional duties
and obligation to them only. Hence The court direct that at least 30% of the
net profits should be set apart as a permanent fund as part of the
industrial/business activity for establishment and maintenance of water
resources, school, hospitals, sanitation and transport facilities by laying
roads, etc. This 20% allocation would not include the expenditure for
reforestation and maintenance of ecology.
Jaduguda Mine, Bihar
The Jaduguda uranium deposit is located in the Singhbhum thrust belt, a
mineral-rich geological zone which has seen extensive mining since the days of
British occupation. It is reported that 26 minerals are currently being mined in
the Singhbhum district alone, including iron ore, copper, manganese, bauxite
and uranium. The Jaduguda mine is situated in a heavily forested area of steep
hills which form a fertile river valley. This is part of the catchment of the
Subarnarekha River, which flows through the states of Bihar, Orissa, West
Bengal. The uranium deposit is operated by the Uranium Corporation of India
Limited (A Government of India undertaking). It is an underground mine and

T E R I Report No. 2001EE42

The Indian minerals sector

61

the ore is processed to produce 200 T of uranium/year in the form of an yellow

cake.
The waste, material (tailings) is treated with lime to neutralise the acidity,
and then separated into coarse and fine particles. The coarse tailings, making,
up to about 50% of the volume of the waste, are backfilled into the mine cavities.
The remaining waste material is dumped in 3 large tailing ponds.
The Jharkhandi Organisation against Radiation (JOAR) is an indigenous
peoples organisation set up in 1991/92 to pressurise UCIL management to
reform its operations. JOAR is pursuing five demands in relation to Jaduguda:
1. Bringing radioactive wastes from other sites in the country and dumping
them in their villages should stop forthwith.
2. International norms and standards for storing radioactive waste that has
already been dumped should be meticulously observed
3. All the villages around the already existing tailing ponds should be resettled
at a safe distance and complete rehabilitation should be undertaken.
4. All the families whose active working members have either died or been
incapacitated and the families which have children with serious physical
and/or mental disabilities should be adequately compensated and the
company should take the responsibility for their treatment.
5. The company should set up a public dispensary manned by medical
personnel qualified to treat radiation related diseases, and its functioning
should be under the direction of the traditional Adivasi leadership of the
Majhi/Pargana.
Coal Sector Environmental and Social Mitigation Project (CSESMP)
In 1991 CIL applied for a loan to World Bank to modernise its mines. The bank
had already been charged with negligence in rehabilitation of displaced people
at Singrauli. Therefore in August 1995 an NGO/World Bank meeting was held to
encourage greater interchange of information and experience so that better
mediation could take place. In the same year, the bank management was made
to realize that the social and the environmental risks of the proposed loan were
of a magnitude that could be dealt with/by a free-standing project. This led to
sanctioning of a separate project known as Coal Sector Environmental and
Social Mitigation Project (CSESMP) and this was to begin prior to the proposed
Coal Sector Rehabilitation Project (CSRP). In all 24 opencast projects were
selected for the CSRP and the ESMP programme was launched in the 24 mines.

T E R I Report No. 2001EE42

The Indian minerals sector

62

The major components of Environmental and Social Mitigation Project were:

Capacity building of CIL to reduce the social and environmental issues of
coal mining operation.
Investment support for implementation of environmental action plan
(EAPs), rehabilitation action plan (RAPs) and indigenous people
development plan (IPDPs) with NGO and community participation
A social remedial action for the earlier four coal mines which received loan
support from World Bank.
The sanctioning of ESMP loan by World Bank was questioned by social action
groups like Chotanagpur Adivasi Sewa Simiti (CASS) a part of the JJM. The
report dated April 20, 1996, by CASS on effects of coal mining at East Parez
mines (Hazaribagh), questioned the very validity of the claims made by CIL. But
on May 16, 1996, the bank approved the loan with a condition that successful
implementation of ESMP will lead to sanctioning of CSRP. After a year or so,
the World Bank sanctioned the main loan for CSRP.
The issues:
The major issue of Displacement and rehabilitation was not adequately
addressed by Coal India. CIL was not compensating for displacement with land
for land or job for land. The alternative income generation program in the
rehabilitation package was insufficient to meet the needs of affected people. The
cost benefit analysis was not given the due consideration. The concerned people
organizations identified 18 issues related to unjust mining and sent it to the
bank. It was termed as a Bench Mark and some of the aspects were as follows:
All relevant information related to social and environmental issue should be
made public.
All land held by project affects population (PAPs) should be compensated
adequately
Total economic rehabilitation should be considered
Consultation and participation of PAPs should be primary objective
An independent panel of experts to review and monitor the social and
environmental issues should be created
Rehabilitation should happen prior to displacement.
The ESMP was to be the future model on rehabilitation and a paradigm of bank
concern for social and environmental issues but the focus remained diffused
because the major national NGO networks were occupied in campaigns of

T E R I Report No. 2001EE42

The Indian minerals sector

63

interrelated issues on several developments in the mining sector in other areas

of the country.
Community consultations and involvement in mining areas: Case studies
A number of companies have taken up community development work in the
mining areas in consultations with the communities. A few case studies are
discussed below:
Bailadila complex, NMDC
The major iron ore projects are located in Bailadila, a 36 KMs long and 10 kms
wide hill-range in the Bastar region of Madhya Pradesh. The area is
characterised by rugged terrain and hills with thick deciduous forest with heavy
rainfall. The area houses a large variety of tribal sects. The area, prior to the
establishment of the projects, was totally cut off from the rest of the country and
was devoid of any basic amenities as well as infrastructure facilities. The people
were illiterate.
NMDC has embarked upon certain community development experiments,
which were later crystallised, into concrete action programmes. As a preliminary
step, projects started extending free medical facilities to the local tribals. The
project doctors with para-medical staff and medicines were regularly deputed to
visit the interior villages to provide necessary medicare at the door steps of the
tribals, then the project concentrated on providing potable drinking water by
constructing tubewells as well as traditional open wells.
The Bailadila Project contributed in bringing about a metamorphosis in the
attitudes/thinking of the tirbals in favour of non-agricultural employement. As a
result, the percentage of tribal employees in the total work force of the Projects
is substantially higher than what the Govt. has prescribed. However, in order to
ensure that the fruits of development are evenly distributed, NMDC has initiated
a regular consultative process on the one hand with the local village-heads as
well as Panchayat leaders and on the other hand with the Unions and
Associations functioning in the project. Periodical meetings are held with the
Sarpanches of various tribal villages adjoining the projects and tentative lists of
the developmental works to be undertaken are detailed. After examination of the
various requirements, the works are segregated under the following major
heads:
1. Medical facilities
2. Education
3. Drinking water

T E R I Report No. 2001EE42

The Indian minerals sector

64

4. Infrastructure facilities like laying of roads, construction of bridges, fair

price shops, electrification of village etc.
5. Miscellaneous
Details of community development works done
1. Medicare: Free medical aid in all respects (both out-patient and in-patient),
including family welfare counselling and operations including free diet is
being provided to the scheduled tribes (Adivasis) residing within Dantewada
Tehsil in Project hospital. Ambulance(s) /hospital equipment were procured
and handed over to the district administration for use in providing medicare
in interior villages. Construction as well as renovation/repairing of PHCs
including provision of infrastructure construction of veterinary hospital with
attached residential accommodation to the doctor were also undertaken.
2. Education: Free educational facilities for children of tribals (local adivasis)
and scheduled caste students in project schools are provided. Besides
constructing a number of school buildings, additional class rooms, ashrams
and hostels, NDMC is regularly undertaking repair/renovation works to a
number of school buildings of State Government and other Tribal schools in
the vicinity of its Projects including electrification works.
3. Drinking water: Number of hand pumps/water tanks/open wells/tube wells
have been constructed for supplying drinking water to the nearby villages.
NDMC has also undertaken: construction of overhead tanks in various areas
for the benefit of local peoples.
4. Infrastructure facilities: Following infrastructure development works have
been done:
-

Roads: All-weather roads to a number of villages connecting one village

and another WBM roads from village to village, town to town, para to
para etc. construction/improvement of approach roads to various
villages black topping of PWD roads repairs to state highway over a
stretch of 25 kms.

Electrification works in the peripheral villages and provision of

streetlights.

Provision of steel walkway bridge over Madadi nallah.

5. Afforestation: Further the extensive tree plantation programmes in which

over 18 lakh trees have been planted in and around various locations of the

T E R I Report No. 2001EE42

The Indian minerals sector

65

Bailadila Projects, the local Adivasis are encouraged to grow saplings in their
agricultural land so that these are purchased resulting in monetary benefit to
them. The projects also provide necessary technical guidance, seeds,
manures, etc. Over the years, the Bailadila Projects have awarded contracts
providing employment opportunities to Adivasis for tree plantation in the
Bailadila area to protect the environment. Up to 1998-99, the Bailadila
Projects had spent around Rs.1360 lakhs on Community Development
works.
Sustainable land management in Kolsoi village in Goa by Sesa Goa Limited
In the Kolsoi village (a village close to iron ore mines), the villagers used to
cultivate paddy during Rabi Season. The run-off from the waste dumps in the
surrounding mines was getting deposited in the low-lying paddy field. The silt
accumulation changed the physio chemical and microbiological properties of the
soil, which resulted in poor crop growth and lower yields. The company used to
pay annual compensation to the farmers for loss of crop and removal of silt from
the fields. As the years passed, the tendency of farmers was to obtain
compensation rather than actually cultivating the land. The practice is prevalent
in many mine areas in Goa. Sesa Goa Authorities decided to tackle the problem
by eliminating the cause of silting and also restore the productivity of the land.
The dump run-off was diverted through a new channel to divert the monsoon
runoff. The trench was wide and had laterite retention walls across, so that water
could be filtered and silt arrested. 1 kilometre length was constructed at a cost of
Rs.2 million. During monsoon, overflow water was monitored to maintain the
total solid suspended solids at the outlet at less than 25 mg/litre. After
controlling the silt, the restoration of agricultural fields was taken up with
community participation.
Community participation is most vital for success of the programme and
therefore villagers suggestions were considered. Agricultural department of
Government of Goa was associated for technical advice and to suggest method
for restoring productivity of the soil. Detail investigation in the farm practices
and soil analysis revealed that:
a) Soil is deficient in potassium and phosphorous.
b) Over the years farmers received the money for silt removal for whatever silt
accumulated but did not remove properly. This has caused accumulation of
silt and change of soil structure thus leading to compaction.
c) There was degeneration in seed material used, which also affected crop
growth.

T E R I Report No. 2001EE42

66

The Indian minerals sector

d) Awareness regarding pest management was very poor.

Accordingly, awareness and training programme for farmers were conducted
(with help of Agriculture department of the Government of Goa and NGOs) to
educate them on proper farm practices to suit the local conditions.
Project detail:
1. Village

Kolsoi

2. Area

8 Ha

3. Number of Families -

40

4. Provided certified seeds to all farmers.

5. For better mixing of soil, power tiller was provided replacing bullock
ploughing which was very shallow.
6. Organic manure and potash supplied to all the farmers for enhancing
nutrient status of soil.
7. Pesticide pump donated to the farmers association and constant follow up
for advising on pesticide spray.
8. Applied lime for correcting PH
With these inputs Physiochemical characteristics of soil improved.
The project was a grand success and farmers harvested a bumper paddy crops.
The project established that paddy fields could be restored back to normal. The
involvement of villagers, Govt Agency, local population and their education and
satisfaction was the real gain for Sesa Goa.
Integrated bio-technological approach for mine land reclamation:
The objective of this approach is two fold i.e. prevention of heavy metal
leachates from dump and rejuvenation of productivity by vegetation of dump
with organic waste and biofertilizer. In this approach mine dumps are evaluated
for physical, chemical and biological characteristics. Based on field studies,
heavy metal protocol is developed to achieve separation of different metals from
mixed pollutants. Various blends of organic waste, mine spoil and biofertilizer
are evaluated for build up of nutritive and supportive capacities. All these
studies are carried out in laboratory and green house. Based on above studies
8000 saplings of 21 varieties are planted on five hectares of rejection dump.
Grass species-Congo is introduced for ground cover. Saplings before planting
are treated with Nitrogen fixing bacteria, Rhizobium and Azaetobacter. Later,

T E R I Report No. 2001EE42

The Indian minerals sector

67

Mycorrhizae is introduced in rhizosphere. The performance of planting is

being monitored regularly.
This project is a collaborative research work in association with National
Environmental Engineering Research Institute (NEERI) Nagpur, Department of
Biotechnology and Lund University, Sweden.
The results of above project are very encouraging.
Indigenous peoples development programme in ESMP projects of WCL
This programme has been taken up in 22 villages surrounding the five mining
projects with a population of more than 35000 people. The following activities
have been carried out by WCL.
-

Skill development: Under this plan skill development training in Goatary,

Poultry, Bee keeping, Tailoring, Stationery making, Pump repairing, Basic
electrician etc. have been imparted to nearly 350 unemployed youths from
the community.

Community awareness activities

Infrastructure development: Which includes - Construction repairing of

internal roads, drains, tube wells/hand pumps/ cleaning of old deep wells,
library rooms, community hall, Installation of overhead tanks etc. All these
activities are undertaken by the village working groups and no contractors
are employed in the job. A major share of the funding is provided by the coal
company.

Formation of self help groups (SHGs): More than 75 SHGs have been formed
in the villages for developing tailoring skills among the village women,
fishery projects, goatery units etc. for income generation.

2.8 Environmental effects of mining

The impact of mining activities on pollution of air, water, land, soil quality,
vegetation including forest ecosystems, and on human health and habitation has
become a matter of serious concern. Any deterioration in the physical, chemical,
and biological quality of the environment affects human health and flora and
fauna. The health problem of miners arising out of on-site pollution due to dust,
gases, noise, polluted water, etc. is receiving increasing attention. Some of the
negative impacts on the landscape and the human environment, can effectively
be permanent. While some segments of the minerals industries, governments
and others are much more conscious of these issues, effective sector-wide
management of these problems is neither universal nor adequate.

T E R I Report No. 2001EE42

68

The Indian minerals sector

The magnitude and significance of impact on environment due to mining

varies from mineral to mineral and also on the potential of the surrounding
environment to absorb the negative effects of mining , geographical disposition
of mineral deposits and size of mining operations. A list of minerals has been
prepared by Department of Environment, the mining of which is supposed to
have serious impact on environment. These minerals include coal, iron ore, zinc,
lead, copper, gold, pyrite, manganese, bauxite, chromite, dolomite, limestone,
apatite and rockphosphate, fireclay, silica sand, kaolin, barytes, steatite. Mineral
production generates enormous quantities of waste/ overburden and tailings /
slimes which are indicated in the following table in respect of some minerals.
These details have been worked out with the help of actual production figures
and the projections made in respect of overburden/waste and tailings/slimes.
Though the Table 14 given below is not exhaustive, nevertheless it gives some
idea about the quantities of mineral and waste material to be handled. Actual
data are not available on the extent of land occupied by mining operations
including waste disposal sites. It is however, estimated that about 10,000 ha of
land was affected in 1999/2000.
Table 14 Mineral production, waste generation and land affected in 1999-2000
S. No.

Mineral

Production

Overburden/Waste

Tailings/ slimes

Estimated land

Norms used

(MT)

(MT)

(MT)

affected (ha.)

(land in ha/MT
of coal ore ore

Coal

300

1100

7500

25

Limestone

129

135

1.06

1300

10

Bauxite

7.1

4.3

3.5

700

10

Iron ore

75

69.9

23.8

700

10

Copper ore

3.1

3.6

1.4

--

--

Lead-Zinc ore

2.8

4.1

2.6

--

--

Manganese ore

1.6

6.8

--

160

10

The total area of mining lease with active mining operations is the minimum
area which is being affected by waste generation. However, the actual off-site
area affected by pollution and degradation by the accumulation of waste
material will be far more than the area of the lease in which the operations are
in progress. It is also possible that a number of mines may exist in a close
cluster adding to the adverse effects. Accumulation of tailings and red mud will
add to the seriousness of the environmental adverse effects.
In addition, there are a very large number of abandoned mines and mining
sites for which detailed information is not available. However, for the coal
sector, it is reported that there are more than 500 abandoned mines in Jharia

T E R I Report No. 2001EE42

The Indian minerals sector

69

and Raniganj coalfields in Bihar and West Bengal respectively occupying more
than 10,000 ha of land. In addition, overburden and spoil dumps occupy large
area of land. A large number of fires have also degraded large areas (2330 ha) in
these coalfields. Presently, there is no specific legislation in India, which covers
the requirements for environmental protection during the closure of a mine.
However, MoEF, while giving environmental clearance for a project may
specify/approve plans for reclamation work to be carried out on closure of mines
as indicated in the EIA/EMP of the project. Recently MoEF has introduced a
system of demanding a closure plan from the mine operators, which should be
submitted 5 years before actual closure of mining operations.

Environmental impact of mining of some important minerals

Limestone
Indian limestone in general is high in silica and magnesia, therefore almost
equal quantity of waste and overburden is generated due to mining of this
mineral. Limestone mines can be categorized as shallow operations and
generally are confined to 40-50 m depth. It is seen that as a matter of practice
one or two small pits are kept as reservoir for water for processing plants and
also for domestic consumption and plantation. This is on account of the fact that
there is general scarcity of water in limestone areas. However, the management
of these mines is instructed to fill back the abandoned pits at least up to onethird part of the mined out areas by the overburden and waste being generated
currently.
The environmental problem in Dehradun-Mussoorie Belt in the Himalayan
Region was acute as the area is a place of tourist interest on one hand and the
limestone is of high grade for steel making on the other. There was a time when
the production of limestone from this area was 1.5 million tonnes per annum
which used to be contributed by 50-60 small mines and medium mines. The
unscientific mining left ugly scars on the sides of the hills, which came to invite
severe flak of communities, media and environmentalists. Public litigation was
filed in the Supreme Court, which gave a ruling to close all mines in the area.
Rehabilitation work has been undertaken in right earnestness, and monitoring
system has been introduced. A number of successful rehabilitation of the mining
areas in the region was carried out the Forest Research Institute (Dehradun,
India).
The high grade limestone mining in Jaisalmer, which produces about one
million tonnes per year for steel plants is following an elaborate environmental

T E R I Report No. 2001EE42

The Indian minerals sector

70

management plan to restrict the advancing desert in the form of sand dunes by
planting trees as advised by the Central Arid Zone Research Institute, Jodhpur.
Mining of calcareous sands in the inter-tidal zone of Gujarat coast in the
Arabian sea near Sikka has been completely banned as this area also bears
corals. The area has been declared as a marine sanctuary. The company has
since located alternative source of limestone for its cement plant.
Iron ore
Iron ore being produced in Singhbhum-Keonjhar, Bellary-Hospet, Baidadila
and Dalli-Rajehra regions does not have much of overburden except for some
laterite, and low grade ferruginous shales. Washing plants were required to be
installed in these locations to improve the quality of ROM. The slime generation
as a result of washing is around 15-20 per cent. In Kudremukh, however, the
slime rejection is as high as 66 per cent of the ore produced. The slimes are
impounded in a tailing pond on a large area in a forest. Water treated for
improving its quality before it is discharged in to river. However, it is seen that
the rivers such as Karo and Baitarni in Bihar and Orissa, Indravati and Sukarni
in Madhya Pradesh and Tungbhadra and Bhadra rivers in Karnataka are
somewhat polluted due to wash offs from mining operations. Construction of
garland drains, check dams, contour drainage and plantation, etc. has been
resorted to in an attempt to check the flow of fines and slimes to water courses
and agricultural land. The condition is different in Goa. Here the overburden is
sizeable. Against annual production of about 15 million tonnes of iron ore, about
40 million tonnes of overburden and waste material is generated. Added to this,
there is an acute shortage of land for dumping purpose.
Bauxite
Several bauxite mines are located on hilltops at altitude exceeding 1000 m. Here
the land is barren having only grass. However, the slopes of the hill are having
trees. In Bihar, Orissa and Madhya Pradesh, the overburden cover may be 3-5
m. The mine at Panchpatmalli, NALCO is the largest mine. Its present annual
capacity is 2.4 million tonnes which is under expansion to double the
production. A barrier of 15 m width round the deposit has been provided to
prevent the fines and waste material from rolling down the hills. Worked out
areas of the mine are backfilled and are rehabilitated by suitable plantation.
However, the main pollution consequent to bauxite mining is because of red
mud which is obtained on conversion of bauxite in to red mud. The quantity of
red mud generation is as much as 50 per cent of the quantity of bauxite treated.

T E R I Report No. 2001EE42

The Indian minerals sector

71

The red mud is generally confined by making barrier/dams in low-lying areas

and water is recirculated to the process plant. Red mud is also being used in
making bricks for civil purposes. R&D work is under progress for its various
other uses. The high quality bauxite of chemical and refractory grades located in
Gajarat and Kutch occur in plane land with 1-3 m overburden. After mining for
about 3 m, the pits are backfilled and the land is reclaimed.
Copper, lead and zinc
In the initial stage, copper and lead-zinc mines were underground mines except
Chandmari of Hindustan Copper Ltd. During 80s, mines at Malanjkhand and
Rampura-Agucha were started in open pits in Madhya Pradesh and Rajasthan.
There is not much of environmental problem due to underground mining, as the
mining methods do not cause any subsidence. Acidic mine water is treated
wherever necessary before it is used. Deslimed tailings by hydrocyclones are
utilised in backfilling of worked out stopes. Slimes are stored in tailing ponds. In
Singhbhum area, tailing ponds could not be provided as there were problems in
acquiring land in tribal areas.
Chromite
Chromite mostly comes from open cast operations. There are three underground
mines besides the open pits. The ratio of ore to overburden is as high as 8-10 in
opencast mines. In Sukinda valley in Orissa, about 30 million tonnes of
overburden material has already been dumped in the viscinity of various mines.
This overburden material contains approximately 0.5-0.6 per cent nickel and 0.1
per cent cobalt. Efforts are on to ascertain the feasibility of recovering these
metals. Another problem is in working the deposits in this area by underground
methods, as the wall-rocks are extremely soft. Therefore, the present alternative
appears to be to continue the open pit mining to as great a depth as feasible. It is
seen that a few mines have already gone below the water table and therefore
pumping operations have become a little too expensive. There is no
contamination of heavy metal in mine water except hexavalent chromium.
Other minerals
Mines of gypsum, china clay, ball clay and chalk are small and shallow and may
not exceed a depth of 10-15 m. Pits are generally worked in a sequence and when
one pit is exhausted an adjacent is opened. The waste material is filled in the
finished pit and land is reclaimed. A large number of mica mines are worked in

T E R I Report No. 2001EE42

The Indian minerals sector

72

Bihar, Rajasthan and Andhra Pradesh. The operations are underground by small
workings and therefore, there is no surface damage because of these operations.

A few case studies

National Mineral Development Corporation (NMDC)
NMDC is operating three highly mechanized iron ore mines, two in Bailadila
region, Chattisgarh state and one at Donimalai in the Bellary-Hospet sector of
Karnataka state producing high grade iron ore of +65% iron content with annual
production of 16 Million Tonnes. All these mines are ISO 9002 accredited. The
only organized Diamond mining operation in India is being done by NMDC at
its Majhgawan Diamond Mining Project in Panna district of Madhya Pradesh
state which is at present producing 60,000 carats and is likely to reach
production of around 1,00,000 carats per year in the next tow years.
In its iron ore mining operations, NMDC has been using wet circuit
beneficiation arrangement, which leads to production of poorer grade tailings.
These tailings have been properly stored on number of tailing dams for
environmental reasons. However, the space for future tailing dam being limited,
permanent solution was to be found for avoiding water pollution problems
which could be caused due to flowing of these tailings if not stored properly.
NMDC has taken a decision to utilize the latest ROMELT PROCESS of steel
making which would be able to consume the tailings (low grade iron ore). The
steel plant with a capacity of 3.0 lakh tonnes per year is being planned and
would be the first commercial plant with the technology.
As a part of its research, NMDC possesses a state of the art R&D Laboratory
at Hyderabad basically established to develop new value added products from
mine and other wastes. Development of soft grade ferrite powder used for
manufacture of components for television, pigment grade ferric oxide for the
Paint industry are some of the innovations made by NMDC R&D centre, from
the waste blue dust of Bailadila region. The 6,000 tonnes per annum Ultra Pure
Ferric oxide plant shortly to be commissioned at Visakhapatnam in AP state is
one of the value-added products developed at our R&D centre from the blue
dust of Bailadila region.
Water management practices in NMDC projects: A Regional environmental
management plan has been drawn for Bailadila iron ore mines complex which
includes Integrated water management. There are a few perennial streams in
the region for which lean and peak discharges are being monitored regularly.
Based on the actual water requirement of the project, water source is identified,
suitable intake wells have been created and pumped to various destinations

T E R I Report No. 2001EE42

The Indian minerals sector

73

including townships. One of the key aspects considered here is that a minimum
of 40% of water is left in every perennial stream for downstream villages and
also not to create impact on the aquatic eco-system along these streams.
At Panna diamond mining project, an artificial reservoir over Kaimason nala
is created for storage of water and use at the mine/plant/township areas.
Similarly, for use of water at Donimalai project, water is tapped from
artificially made Narihalla reservoir over Narihalla stream.
Wet screening of ore in order to remove attached/ adhered gangue material
demands maximum share of water for any iron ore production project. The
requirement of water for wet screening operations is about 0.85 cum/tonne of
ore. For better recovery of fine ore, slow speed classifiers are used. Thus only a
small amount of iron ore microfines along with shaly material is let out to the
tailings dam. Due to this process the life of the tailings dam has increased. The
supernatant water from tailings dam is recycled back to screening plant and the
make up fresh water requirement is only 30%.
Several check dams have been constructed at strategic points so as to reduce
velocity of water flow and help in arresting silt loads flowing down the slopes.
Construction of buttress walls all along the toe of waste rock dumps, chain
linked boulder mesh walls around the toe of old fine ore dumps, trench cutting
and provision of garland / storm water drainage network, provision of steel
launders for properly routing mine drainage, mechanized and manual desilting
of tailing dams and check dams have proved very effective in controlling surface
water pollution in and around active mining areas.
Bailadila iron ore mines
The area comprises a hill range 40 km length and 10 m width with highest peak
going up to 1,276 m above MSL and planes rising 300-400 m with hillocks up to
600 m MSL. There are 14 iron ore deposits here out of which deposits 14, 11C
and 5 are under mining at present. Deposits 11B and 10/11A are also being
planned for mining. The entire area is in a forest, which is of southern tropical
dry deciduous type mostly with certain patches of northern tropical dry
deciduous type. The forest is wide spread and is fed with good rain- falls and has
rich flora and fauna. The hill-tops are barren because of outcrops. The area of
the different mining leases are being used for pit excavation, approach roads,
haul roads, waste dumping, construction of ore processing and loading plant,
stock piles, tailing dams, functional and residential housing. About 400 hect.
out of the ML area of 954 hect. of Deposit 14, and 459 hect. out of ML of 672
hect. of Deposit 5 have been utilized as above. These areas were barren hilltops

T E R I Report No. 2001EE42

The Indian minerals sector

74

and the dense forest area has not been affected excepted for small parts which
were covered by waste debris flown down under gravity.
Interpretation of satellite data generated during 1985 and 1991 indicates that
dense forest remained the same at 12.5 per cent, degraded area decreased from
17.6 to 14.3 per cent, land use due to mining and other activities increased from
2.2 to 3.8 per cent, crop land increased from 3.9 to 5.1 per cent and built up area
remained same at 0.8 per cent. A small area spoilt by dumping has been
compensated by afforestation. The new mines coming up (which have ML of 391
and 75 hects.) will be in barren land on the hilltop.
For disposal of waste dump, sites were selected carefully with consideration
of topography in mind in order to restrict the flow of materials in to the natural
watercourse. Areas where closed valleys and/ or blind angles exist are proposed
with rock toes. For environmental friendly disposal of waste, fast growing trees
were planted on flat top and inwards sloping areas with construction of small
terraces. The reclamation of Deposit 14 has also been taken up with the
support of the data collected over the last 20 years, it can be stated that there is
practically no climatic change in the area except for the cyclic heavy rain every 4
to 5 years.
Reclamation of an abandoned mine site in Goa by Sesa Goa Limited
The Sanquelim mine is situated at Sanquelim, North Goa and is spread over an
area of 200 Ha. The mining operations started in 1960 and the mine was
exhausted in 1988. A more detailed and scientific land reclamation strategy was
adopted in this mine.
The experience of rehabilitation of Orosso Dongor mine was utilized at
Sanquelim for covering clay with laterite terrace and construction of chek, dams
settling ponds and planting Acacia and cashew. In addition to steps explained
earlier, Pot Culture experiment was conducted with the objective to identify
plant species that can tolerate inhospitable condition of mine sites and grow
without artificial aid such as fertilizer and irrigation. In the pot culture
experiment different local species were planted on the dump in the dry season.
A earthen pot was buried adjacent to the plant and filled at regular interval.
Though seepage plant would get regular supply of water. After six months 90%
survival was observed indicating, moisture was main inhibiting factor for plant
growth. The results revealed that, local flora can grow on mine rejects if the soil
is supplemented with organic matter in the form of Neem cake, Organic manure
Myceameal etc. These findings were used to make plantation programme

T E R I Report No. 2001EE42

The Indian minerals sector

75

more scientific and to introduce local flora thus improving the biodiversity of
reclaimed area.
Malanjkhand copper mine
Malanjkhand mine of HCL produces 2 million tonnes copper ore per year. Here,
the overburden is 4 to 7.5 m3 per tonne of ore. A matching beneficiation plant
and tailing disposal system and water reclamation plant supports the
operations. A 5 km long green belt around the industrial area has been
generated. As the quantity of overburden is large, a height of 60m has been
designed for dumps. The tailing dam would also have an ultimate height of 47
m. Another dump has been created for lean grade sulphide and oxide ores. R&D
work on recovery of copper by acid leaching of oxide ore and bio-leaching of
sulphide ore has also been done. The stockpile for the lean ore is so located that
it does not pollute storm water drainage and ground water. Waste dump is
sufficiently flat to control encroachment of adjoining paddy fields. A garland
drain has been provided at the outer side of the waste dump to provide further
protection to the agriculture land. The mine is under expansion to an annual
capacity of 3 million tonnes of ore. The final backfilling will be decided only after
the expansion. An underground mine may also be opened to be operated along
with the expanded opencast mine. This will enable the management to have a
matching smelter at the project.
Handling a total amount of fine siliceous tailings at 5,800 tpd is a little
problematic though copper, iron, sulphur, aluminium, calcium, magnesium and
cobalt are in limited quantity. The tailings are carried to a confined isolated
place, 14 km away in a 250 mm diameter pipeline. The water is collected after
desilting for pumping, back to the project for recirculation. A second dam has
also been provided downstream to take care of spillage of tailings during the
monsoon.
Central India manganese ore mines
Manganese Ore (India) Ltd. which operates these mines adopted an Integrated
Biotechnological Approach (IBA) which can be defined as a systematic
procedure for scientific reclamation of mine spoil dumps. The work was carried
out in association with National Environmental Engineering Research Institute,
Nagpur. The method involves co-recycling of mine spoil with sugar mill waste as
press mud. The organic waste provides suitable substance for proliferation of
soil microflora. It involves inoculation of plants with specialized culture. The
microorganism secretes hormones, which help to improve plant establishment

T E R I Report No. 2001EE42

The Indian minerals sector

76

and growth. Ecological cycles in rhizosphere are restored just in 18-20 months,
which otherwise takes decades. IBA helps in assisting the establishment of trees
such as mango, sapota and pomegranate.
When the press mud was mixed with mine waste at the rate of 100 t / hect., it
improved the water holding capacity to 33.95 from 10.6 per cent., spoil organic
matter also improved from 0.249 to 1.58 per cent. Nitrogen content improved
from 16.9 mg/100 g of spoil to 180 mg/ 100 g. The use of press mud improved
the rate of plant growth 8 to 12 times the rate seen in normal spoil dumps. Plant
survival went up from 15 to 87 per cent.
Mining operations by surface miner Gujarat Ambuja Cements Limited
(GACL)
GACL since inception has been endeavouring to adopt stringent measures for
environmental protection and maintenance of ecological balance in all its
activities including mining operations. GACL is operating three captive open
cast mines and exploiting limestone and marl. The total production of limestone
and marl are of the order of 5.15 and 1.85 MTPA respectively to meet raw
material requirement of 3 plants located at Ambujanagar in Lodinar, Gujarat.
Captive mines are located at Vadnagar and Rampara villages.
The management of the GACL has been making continuous efforts towards
eco-firendly and environmentally safe methods of exploitation of raw material
having been beset with the situation of operating limestone deposit located
scateredly inter sparced with agricultural fields, infrastructure, villages and
habitation. These continuous efforts led to deployment of State-of-theart mining
equipment, which was introduced on 15th February 1995. This eco-friendly
machine facilitates operation in close proximity to agricultural fields and as well
to human dwellings. The successful trials of Surface Miner made the company to
change over from the conventional methods of mining operations, thereby
totally eliminating drilling and blasting as well ripping and dozing w.e.f March
1998. Today the company is a pride owner of five Surface Miners having capacity
to produce 4000 to 4500 TPD of limestone each. The entire raw material
requirement is met through Surface Miners.
The equipment provide advantages over conventional mining operations such
as:
Total elimination of drilling and blasting
Operation are eco-friendly and environmentally safe without any hazards

T E R I Report No. 2001EE42

The Indian minerals sector

77

Absence of ground vibrations, noise air blast, dust and oversized boulders
which are usual with conventional method of mining
Highly simplified operations of breaking, crushing and loading limestone
into tippers/dumpers in one single operation
Production and effective control over, the size of excavated material does not
warrant further crushing and can be fed directly
Floor of the worked out mines render uniform, clean and even without any
undulation. Topography of the worked out mine is very neat and clean as
against indelible scares left over by conventional methods
The machine meets the norms prescribed under EURO II standards for
automobile emissions
The surface created by Surface Miner is clean, level without any undulation.
These mined out areas could be used for developing artificial ponds to promote
Pisciculture or it could be even used for agricultural purposes after due
rehabilitation through topsoil management. Mining activity in this area has
resulted in creation of large size pits in the lease areas over a period of time. Out
of the available excavated area of 152.0 ha. after exhausting the mineral at
Vadnagar mine, an area of 75 ha has been brought under post mining
reclamation programme. Similarly at Solaj 5 ha of area has been brought under
reclamation. This accounts for 55% of area under better landuse after the
exploitation. The following statistics illustrates various reclamation efforts.
Type of reclamation
Area under Civil Construction

Area (ha)
13.00

Area under green belt

5.15

Area under plantation

38.85

Area under water body

15.00

Area under pasture land

Total

3.00
75.00

Panchpatmali bauxite mine of National Aluminium Company (NALCO)

NALCO a Public Sector Company setup in 1981 to exploit a part of the large
bauxite deposits discovered in the East Coast. Aluminium Pechiney of France a
major World leader in this field, provided the technology and basic engineering
for bauxite mine, alumina refinery and smelter. NALCO is a major manufacturer
and the largest exporter of alumina and aluminium in India. The production
capacity is as follows:
Bauxite mine 4.8 MT/annum

T E R I Report No. 2001EE42

The Indian minerals sector

78

Alumina refinery 1.5 MT/annum

Smelter plant 0.345 MT/annum
Captive power plant 960 MW
The environmental management plan being followed in the mines is given
below:
Starting from the day of mine development, both the short term and long
term mining plans ensure;
-

A Periphery barrier with green belt around the mine

Garland drains ahead of mine to divert fresh surface run-off water to

avoid contamination

Separate handling and preservation of top soil for its use in afforestation

Sequential back-filling of mined out areas by fragmented overburden of

advancing faces.

The overburden excavated initially for mine development and the excavated
materials of construction period are dumped in selected sites with care taken
for slope stability, drainage control and these dumps have been covered by
afforestation with bunds below to restrict wash cuts.
Bench floors below the surface contour and drainage within the mines collect
the polluted water in large sumps within the back-filled area.
Maximum use of Ripper Dozers in both overburden and bauxite faces &
back-hoe shovels for soft bottom bauxite is in practice to minimise the
effects of blasting.
Sprinklers are constantly used throughout the mine, Haul Roads and
Crusher area to reduce dust pollution.
Conveyor and transfer areas are covered.
Various mining equipments are periodically checked for vibration, noise and
air pollutions.
Water flow and its quality in perennial springs in the valleys below are
regularly monitored to assess the effect of mining.
Re-shaping of mined out area to blend with surround land scape after backfilling by Overburden using top soil and extensive afforestation.
Monitoring of Safety, Environment and Occupational Health aspects by a
Multi disciplinary Environment Management team to ensure meeting of all
statutory norms & Periodical audits on these aspects are also taken up
through external agencies.
Sociological and periphery development activities are continuously carried
cut for development of surrounding tribal areas.

T E R I Report No. 2001EE42

The Indian minerals sector

79

Afforestation is regularly carried out in freehold areas, valley slopes,

periphery barriers, dump sites and reclaimed mined out areas. The high
altitude nursery in mines provides required forest and indigenous species.
So far, about 8,00,000 trees have been planted over more than 400 hectares
of land alongwith avenue plantations, development of gardens and
experimental plantation.
Achievements: After Ten years of operation, there has not been any significant
change in climatic conditions. Doubt raised on the effects of mining on
hydrological condition and perennial springs are now eliminated. Water flows
in the springs have increased. The condition that it should be clear and free of
any washouts or chemical pollution is now achieved. Mining has not disturbed
the natural landscape and has no adverse effect on land use pattern and
habitation in the adjoining areas. The mine rehabilitation with reclamation of
mined out areas followed by afforestation has proved to be successful. Waste
land reclamation and afforestation with green belt development has been very
effective. Further, the plateau top and slopes, which were barren earlier, has
now come up with thick green vegetation. The drainage system with sumps in
back-filled area alongwith this vegetation has increased the moisture level and
have charged the aquifer. Today, Panchpatmali Bauxite Mine is assessed to be a
model mine with respect to Environment Management & in particular for
reclamation of mined out areas with extensive afforestation around the mine.

2.9 Corporate investment considerations

In the mining sector, a number of countries have modified the mining statute or
tailored suitably their policies and legislation in order to motivate assistance,
both technical and monetary from agencies within the country and also from
other countries. About 50 countries have already made changes in their statutes
for inviting foreign investment. These include Chile, Mexico, China, Botswana,
Zimbabwe, Zambia, etc. India came out with a new Industrial Policy in 1991
followed by a national Mineral Policy in 1993 in line with the concept of
globalisation, privatisation and liberalization. The salient features are:
1. Introduction of foreign technology and funding in exploration and mining of
high value and scarce minerals
2. Foreign equity investment in joint venture in mining with company
incorporated in India. .
3. Allowing exports after meeting domestic demand

T E R I Report No. 2001EE42

The Indian minerals sector

80

4. Giving preference to those who will take up mining for captive use in case
the resources are not abundant
In February 2000, the Government has approved the policy of foreign equity
holding up to 100 per cent through the automatic route for all minerals except
diamond and precious stones. This covers exploration, mining, mineral
processing and metallurgy. In the case of diamond and precious stones, foreign
equity up to 74 per cent will be allowed on the automatic route for exploration
and mining operations. Proposals seeking higher than 74 per cent foreign equity
in diamond and precious stones shall be approved by FIPB on case to case basis.
Areas in which the foreign equity support is required includes exploration,
new mining ventures, mines which are likely to be closed otherwise, difficult
mining operations, rehabilitation of closed mines, working of lean deposits and
complex ores, economic recovery of by-products, utilization of low grades, etc.
Potential also lies in the down stream of the mining sector such as smelting,
refining and special fabrication in modernization and also capacity
augmentation. Alumina and aluminium should also draw attention particularly
because of high energy cost. Another feature which is to be paid heed to is the
fact that only the large deposits, large operations and large parties are attracting
FDI and small mining operations are being ignored altogether. In small mining
sector mobile crushers, custom milling, working of pockety lensoid deposits may
also be considered for the purpose. The FDI assistance can come from:
1. International agencies such as the World Bank, IMF, UNDP, Asian
Development Bank
2. Multanationals from countries such as the USA, Canada, Australia, South
Africa, the UK
3. Bilateral agreements from countries such as France, Russia, China,
Australia, etc
4. Regional agencies such as European Community, Colombo Plan, Common
Wealth Secretariat
5. Commercial Banks across the globe
6. Non resident Indians
The foreign companies, which are taking interest in negotiating with mining
sector, include CRA Mineral Exploration with ACC and BHP with HZL both
from Australia, RTZ of UK with OMC and De Beers of South Africa with
Reliance. All these negotiations were on exploration. Ministry of Mines,

T E R I Report No. 2001EE42

The Indian minerals sector

81

Government of India has established an International Co-operation Cell in the

Ministry for the purpose.
Till October 2001 FIPB has approved about 70 proposals in the mining and
mineral sector for a likely total investment of about Rs.40 billion of which the
foreign company inflow is expected to be about Rs.2.5 billion. The details are
given in Annexure 10.

Disinvestment by the Central Government in Public Sector

Companies operating in the mining sector
Extensive programme of State disinvestment from public sector companies
(including mining companies) have been initiated in India. Privatisation can
take a variety of forms:
1. Regulation of state assets through full divestment of states interests
2. Partial sale of state ownership
3. Injection of private capital for the development of new ventures
In the non-coal mining companies, the approach 2 is being followed, whereas for
the coal sector the approach 3 is being followed. The case of some public sector
companies are discussed below.
The privatisation of natural resources, energy and infrastructure sectors
reflects a fundamental reappraisal of the states role in the development of
natural resources for national benefit. The states direct role from being the
owner, operator and regulator of mineral production is being reduced to that of
a facilitator of mineral production. The state aims to ensure social benefits from
mineral extraction through the mechanism of regulation and taxation.
Bharat Aluminium Company Ltd (BALCO)
BALCO is one of the profit making companies in the country. It makes a net
profit of about Rs 100 crore with a turnover of Rs 1,000 crore. The paid up share
capital is Rs 500 crore and networth is Rs 600 crore. Initially three
organizations were taking interest in acquiring shares of BALCO. These included
HINDALCO in association with ALCOA, NALCO and Sterlite Industries.
However, NALCO opted out soon after. Jardine Fleming India Securities Ltd.
worked as advisors for disinvestment purposes. The evaluation of shares was
carried out based on discounted cash flow, balance sheets and assets. The
decision went in favour of the Mumbai based Sterlite Industries, which bought
51 per cent shares of BALCO for Rs 551=50 crore. The company has interests in
copper and aluminium.

T E R I Report No. 2001EE42

The Indian minerals sector

82

However, as soon as the acquisition of BALCO took place, it did not go well
with the newly carved State of Chhattisgarh, local authorities, Unions and
workers. Work was struck for a long period of 67 days, which could be resumed
only on 9th May 2001 after an agreement on 24 demands was arrived at. These
demands were primarily on personnel matters. It was assured that there would
not be any retrenchment for one year, and a voluntary scheme thereafter will be
floated to shed the excess flab.
The Hon. Supreme Court approved the deal of acquisition of BALCO by
Sterlite in its judgment of 10.12.2001. BALCO is in need of upgradation of
technology as it has been operating on the technology, which is two decades old
by now. Also, upscaling of alumina and smelting facilities is necessary.
Meanwhile, Orissa State has allotted to BALCO a bauxite mine, Sashubohumali,
in Koraput district, which has reserves of 30 million tonnes of high grade
mineral.
Hindustan Zinc Limited (HZL)
HZL is another public sector undertaking with a very sound infrastructure. It
produces 65 per cent of the zinc in the country and also substantial quantities of
lead, silver and sulphuric acid. HZL is planning to have a green field zinc smelter
at Kapasan in Rajasthan, which will have annual capacity of 100,000 t. At
present the Government of India holds 75.92 per cent shares, 24.08 per cent
having been already sold to the public as far back as 1992-93. It is now proposed
to make over another 26 per cent to a strategic partner with a five-year lock in
period. Government of India will therefore, retain 49.92 per cent shares.
However the Government plans to have its six Directors including the Chairman
on the 11-member Board. The remaining five Directors including the Managing
Director will come from the strategic partner. As many as eight companies have
indicated interest in acquiring the shares of HZL, which include Sterlite
Industries, Indo-Gulf Corporation, Glancore International, Phelps Dodge, etc.
The bidder is required to have a turnover of at least Rs 650 crore per annum
and a networth of Rs 350 crore. BNP-Paribas has been appointed as a global
advisor.
National Aluminium Company Limited (NALCO)
NALCO is one PSU, which has been doing consistently well over the last several
years. Its operating margin is 38.9 per cent compared to another aluminium
manufacturer BALCO at 8.2 per cent. The authorized capital is Rs. 300 crore
and paid up capital is Rs 644.31 crore. NALCO has expanded its mining capacity

T E R I Report No. 2001EE42

The Indian minerals sector

83

to 2.8 from 2.4 million tonnes per annum. Further expansion plans include
alumina from 800,000 to 105,000 t, bauxite from 2.8 to 4.8 million tonnes,
aluminium from 230,000 to 345,000 t and power from 720 to 840 mw at a total
estimated cost of Rs 4,000 crore. NALCO is considering diversification in
manufacturing wheels, car components, zeolite and special grade alumina. The
Company was also to sign an agreement with the Moscow Institute of Steel
Alloys and Romelt Sail of India Ltd. to have a project for extracting pig iron from
red mud. NALCO has already shed its 13 per cent shares to financial institutions,
retail investors and employees. Further 30 per cent shares are under
consideration for being off loaded to bring the same down to 57 per cent.
However, in a recent development, the Parliament Standing Committee on
Industry has recommended that the disinvesment of NALCO may be avoided
and assistance should be given to increase its presence in the international
market.
National Mineral Develoment Corporation (NMDC)

NMDC is one PSU, which is presently giving excellent results.

The present holding of the Central Government in NMDC is 96.36 per cent. A
small part of the holding, 1.62 per cent has already been off loaded. The rest is
with the State Government and other collaborators. Disinvestment Commission
has recommended 20-25 per cent FDI, which also includes a joint venture to
bring latest technology and management practices.
Kudremukh Iron Ore Company Limited (KIOCL)
KIOCL has an iron ore mine, which is performing well in spite of all odds in the
past and also in the present. The present problem is on account of delays in
getting the renewal of the mining lease for a reasonable period. KIOCL is a
profit-making company. The disinvestment to the extent of 74 per cent has been
planned leaving 26 per cent with the Government. The plans have been deferred
for the time being, pending finalization of mining lease extension.
Hindustan Copper Limited (HCL)
At present HCL is in a lot of financial problems as the company is incurring
severe losses primarily because of the depressed prices of copper metal in the
international market. The accumulated losses are as much as Rs 300 crore and
liabilities total up to Rs 150 crore. Another Rs 150 may be required to overhaul
the present facilities. HCL is planning to hive off its facilities in Khetri and
Taloja in another company by allowing the joint venture partner to acquire 51

T E R I Report No. 2001EE42

The Indian minerals sector

84

per cent stake. The disinvestment has been kept on hold for the time being as
the Unions are taking time in appreciating the value assigned to the shares.

2.10 Summary of the findings of the study

The mining and mineral industry in India has grown significantly in the last
three decades;
Contribution from public sector companies in the value of mineral
production was 84% in 1999-2000;
The share of mining and quarrying in Indias Gross Domestic Product is in
the range of 2.2 to 2.5% only. But mining and quarrying contributes 10 to
11% in industrial sectors GDP;
Share of mineral exports in the total merchandise exports from the country
was 17.6% (1998-99). Excluding export of diamonds (cut), the export of
other minerals and ores account for only 3.1% of the total exports;
The share of imports of ores and minerals was 21% (1998-99) of all
merchandise imports. Here also raw diamonds and crude oil accounts for
82% of mineral imports;
The royalty rates on minerals are observed to be high as compared to many
countries;
The organized mining sector employed about 0.7 million in 1999 as against a
total workforce of 27 million in the organized sector. In the mining sector,
coal industry employs about 70% of the workforce followed by iron ore,
limestone and manganese. No estimates are available of the workforce in the
unorganized mining sector. In India, as per 1991 census data, about 259
million are employed in the unorganized sector;
National Mineral Policy has been announced in 1993 to attract private
investment (domestic and foreign) in the mining sector to sustain / expand
its growth, MMRD Act has been amended accordingly. Rules for foreign
direct investment have also been liberalized;
Small scale mining contributed about 6% of the total value of mineral
production in 1998-99 but employs a much larger workforce. There are
many issues including technical, environment, and social, which need to be
addressed;
Community issues: Land acquisition is one of the most important issues over
which many social action groups are agitated. They are forcing the
companies and government to address the issues of land acquisition and
Resettlement and Rehabilitation.

T E R I Report No. 2001EE42

Sustainable development of mining

areas

The negative public perception of the mining industry will not change overnight
regardless of the mining industry supporting any initiative for environmental
upgradation. The violation of expected environmental norms by any one
organization raises a question mark about the credibility of the industry as a
whole. The mining industry must turn to the local community in which they
operate directly in order to win the peoples hearts and minds. The mining
industry must re-establish the connection between its products and the people
that use them through a comprehensive public outreach effort. There is a need
to re-examine each mining operation and improve or maintain their community
relations programmes and sustainable environmental management systems.
There is a need to increase the professional staffs for these programmes and
systems in lieu of expensive and ineffective campaigns, which are only seen by
the public as propaganda. And finally we must come to grips with the economic,
environmental, and ethical consequences of closure of mines. These are the
challenges to be addressed in the future. Three topics are discussed in the
following paragraphs.

3.1 Priority areas for further research

3.1.1 Developing tri-sector partnership in mining areas

Mineral development, while increasing employment and incomes in mining and
related activity, does create serious environmental damage and can undermine
other socio-economic development opportunities of local communities. It is
necessary to address both the environmental damage and the socio-economic
constraints created by mining operations. The attempts to redress these impacts
have so far been piecemeal and adhoc with little research or consultation with
the groups that are supposed to benefit from these actions. The net result has
been a growing level of dis-satisfaction amongst the community. Therefore, it is
necessary to carryout research / studies to correct this narrow approach through
adopting a multi-dimensional approach that integrates a number of activities
that range from the technical to the social, to training and capacity building. It is
increasingly evident that lasting solutions require tri-sector partnerships

Sustainable development of mining areas

86

between company, government, and community. New and innovative aspects of

this research would be as follows.
Forming strategic partnerships to work towards lasting solutions
Addressing frontally issues and constraints that will lead to improved health
and quality of life, and thus sustainable economic and social development of
local communities stressed by current mining activity
Improving the social and environmental knowledge base to allow local
communities to control more actively their own environments, in particular
women community members
The project will add value to the management of societal change by:
-

Transferring and building upon existing experiences and techniques

from a wide range of studies on mining, environment, and communities

Strengthening the information base of all stakeholders

Developing tools for delivering this new knowledge to all levels of society

Contributing to learning processes at all levels of society

Ensuring that tools for use of knowledge reach all potential stakeholders

The research study can be taken up in 1-2 mining areas as case studies. It has
wider applicability and potential for replication as lessons learned and the
experience of forming partnerships and identifying strategies for sustainable
development can be used elsewhere.

3.1.2 Mine closure: issues and options

A mine may be closed because of the following reasons:
Mineral deposit gets depleted
The mine become uneconomic to work due to
-

prices of minerals/metals being un-remunerative

grade of the deposit is too low

workings are too deep

nature of the ore poses problems in efficient metal extraction

The mine workings have become unsafe

The lode or the seam has become unworkable
The mining lease expires, and no further renewal is granted by the
Government; and
Mine management loses interest in further operations
It will be seen from the above, that in the closure of mines the economic factors
play a major role than other factors. Before the mine is closed, the Government

T E R I Report No. 2001EE42

Sustainable development of mining areas

87

is required to be informed under Rule 23 of the Mineral Conservation and

Development Rules, 1988. Action is also required to see that harmful gases are
not released from the mine to the atmosphere and therefore, the workings are to
be properly sealed. The mine workings should also be fenced both in case of
open cast as well as under ground mines in order to avoid any untoward
incident.
Many times it is seen that when a mining lease is about to expire the
management does not apply for its extension for some reason even though the
deposits can be worked. The mine is thus abandoned though the reserve could
have been mined for a few more years. The statutory authorities are not in a
position to compel the mine management to apply for renewal of extension even
though the action of the management is against the interest of conservation of
mineral resources. Once the decision for closing a mine is taken several
problems arise. Unions become active. The local politicians become restive. The
questions for rehabilitation and employment of local populace are raised.
Environmental degradation is left unattended.
Presently there is no specific legislation in India, which covers the
requirements for environmental protection during the closure of a mine.
However, MoEF, while giving environmental clearance for a project may specify
/ approve plans for reclamation work to be carried out on closure of mines
indicated in the EIA/EMP of the project. Recently, MoEF has introduced a
system of demanding a closure plan from the mine operators, which should be
submitted 5 years before actual closure of mining operations.

Planning for closure

Planning for closure can generate benefits at two levels: First, at the level of the
local community or region; and second, at the level of the mining company.
Closure of mines, in the absence of any systematic planned closure process, may
have serious consequences for local communities because of their dependence
on a livelihood provided by the mining activity. A forward looking approach can
involve developing viable economic alternatives, transforming mined land for
productive purposes such as for growing cash crops, and possibly timing new
mining projects in the region to follow on consecutively. It can also provide the
framework for the psychological adjustment to unemployment. Planning for
closure can enable the regions resources to be mined in a manner that does not
result in a net impoverishment at the close of mining operations and avoid
damage to ecosystems that have a positive value to local communities and

T E R I Report No. 2001EE42

Sustainable development of mining areas

88

business activities. The benefits of planning for closure to a mining company are
that it:
Ensures that stocks of water, air, land (components of the natural
environment necessary for production) are available for future operations;
Provides a healthy environment for miners to work and live thereby
maintains / increases the productivity of the workers;
Reduces the extent and expense of final restoration;
Reduces future risk of more strict regulation;
Improves the companies profile and track record in environmental matters;
and
Reduces tensions and conflicts with local communities.
The attractiveness of the concept of planning for closure as a whole life-cycle
approach by managing the environmental impacts from mining from
development through operations to closure is rooted in the time factor. The
greater the time lapse between the occurrence of environmental damage and its
restoration, the greater (in most cases) will be the resources (both human and
financial) necessary for addressing the problem.
The identified issues for research study are:
Adequate attention has not been given to the issue of environmental
protection on closure of mines. Closure of mines involves safety,
environment and social aspects, which need a comprehensive study. In
India, there are too many examples of abandoned mines both in the coal and
non-coal sector;
There are no detailed guidelines on de-commissioning of a mine site and
also post closure-monitoring programmes;
This has led to the deterioration of environmental quality in many areas in
the country.
A study on closure of mines addressing the above issues is another potential area
for research.

3.1.3 Small scale mining: issues

In India, as per as International Labour Organisation report (1999), there are
more than 10,000 small scale mines (of which 10%60% may be illegal),
employing about 1 million people including women and children. The extent of
illegal mining is often linked to difficulties in obtaining permits. In these mines,

T E R I Report No. 2001EE42

Sustainable development of mining areas

89

there are serious problems as regards health and safety, the environment,
hygiene and working conditions including child labour.
Like most economic activities, small-scale mining has positive and negative
aspects. It is closely linked to economic development, particularly in the rural
sector in many developing countries and helps to stem rural-urban migration,
maintaining the link between people and the land. It makes a major contribution
to foreign exchange earnings; enables the exploitation of what otherwise might
be uneconomic resources; and it has been a precursor to large-scale mining. The
social and economic complexity of small-scale mining and the fact there is no
model on which to develop a sound theory or programme needs a research
study, which can cover the following issues.
Occupational health and safety;
Women and child labour;
Legislative framework;
Links between large and small-scale mines; and
Co-ordinating assistance to small-scale mining.

3.2 Policy reforms for contribution towards sustainable

development in mining areas
In spite of a very elaborate mining legislation in the country, it is felt that there
exist a number of gaps. These gaps need to be bridged. Certain amendments are
on the anvil both at the level of the Central Government and also various State
Governments, which would be of assistance to the prospective investors. Some
suggestions are as follows:
It would be seen that there is a very comprehensive legislation for the
conservation of non-coal minerals. The Minerals Conservation and
Development Rules, 1988 which were framed under the Mines and Minerals
(Regulation and Development) Act, 1957 have been specifically provided for
the purpose which have since been amended from time to time. Indian
Bureau of Mines is a Central Government Department, which looks after this
aspect of mineral development. On the other hand, there is no exclusive
regulation to take care of conservation aspect of coal.
While comparing the two sectors, coal and non-coal, it will be
appreciated that coal alone is much more vital to the economy of the country
compared with the 80 or so minerals in the non-coal sector in terms of
tonnage and value produced and also industrial utility. Moreover, the
country is deficient in coking coal. Therefore, it appears that it would be
appropriate to have regulation to look after the conservation of coal with the

T E R I Report No. 2001EE42

Sustainable development of mining areas

90

exclusive back up in terms of legislation and facilities for overseeing the

implementation of the same.
Some preferential treatment has been extended to the weaker section of the
society while granting the mineral rights in respect of small deposits in the
scheduled areas. As per the National Mineral Policy, 1993, preference should
be given to scheduled tribes for the grant of mining lease in such areas. As
per the decision of the Hon. Supreme Court, the mining leases in tribal areas
are to be awarded to tribals only. Thus, there is a need to gear up the mining
industry for the same in terms of facilities and funding.
Ever since the liberalization of Indian economy was effected, not much
benefit has flown to mineral sector in terms of private and foreign
participation. Thirteen minerals (iron ore, manganese ore, sulphur, chrome,
gold, diamond, copper, lead, zinc, molybdenum, tungsten, nickel, platinum
group of minerals) earlier reserved for exploitation by public sector only,
were opened for private investment.
It is a task for the policy makers to make the mineral development
process investor friendly. A prospective investor, domestic or foreign, may
feel that a major deterrent to investment is the existing slow and heavy multi
-layered bureaucratic procedure and administrative mechanism resulting in
unwanted and avoidable delays.
Some experts have been advocating single window clearance though this
has not gained much of favour over the years. Here, the single- window
means single-table under the single-roof. The interdepartmental coordination need not be the botheration of the applicant. Presently the
applicant for mineral concessions is required to run from department to
department and within the department from desk to desk even to obtain the
relevant application forms. The clearance from various departments is not
concurrent and it may take 2-3 years or even more. The applicant gets
exasperated, and the loss of time means escalation in the cost of the project.
Under such conditions, the concept of Single Window Clearance can serve
ideally, as it would be of great help in terms of saving energy and time.
The Government of Rajasthan has opened a website on which the
applications for concessions can be filed on e-mail. This means that they are
making efforts even to go beyond the concept of the single window clearance.
Uttar Pradesh has compiled all relevant application Performa in a booklet
form so that the investors know what he is supposed to do for obtaining
mineral concessions.

T E R I Report No. 2001EE42

Sustainable development of mining areas

91

The Central Cabinet has recently approved increased private participation in

coal exploration and its mining. The amendment of relevant Act will pave the
way for almost unrestricted participation of private sector in coal.
As certain minor minerals are gaining importance in the Indian economy,
they may be considered for inclusion in the list of major minerals for their
proper exploitation at the national level. Granite is a major claimant for the
revised categorization.
Comprehensive legislation for development of off-shore mineral resources
for their operating rights need to be framed in view of the absence of
commercial deposits of nickel and cobalt in the country and deficiency of
copper resources. This legislation may be separately framed for
reconnaissance, exploration and production phase.
There is a time limit of 90 days for the approval of mining plans but there
are no time limits for the grant of mining lease which should be introduced.
This may be different for major and minor minerals, and minerals in forest
and non-forest areas. This state of Andhra Pradesh has a time limit for
granting mining lease as 3, 6 and 9 months for minor and major minerals in
non-forest and forest areas.
Only a few states have come out with a mineral policy. Some have not even
framed minor mineral laws for the exploitation of the same.
The State Governments may have website just as Rajasthan which should
include information on areas already prospected and areas for which
prospecting license and mining lease have already been granted and yet to be
granted. In respect of the areas, which are still available for concessions,
base level information such as type and occurrence of minerals in the area,
extent and quality of reserve, availability of infrastructure facilities, water
and energy, and environmental and sociological parameters may be available
on it. This will assist the prospective investor to know for which areas he
should apply for concessions. This will eliminate infrastructure applications
altogether. The State Governments may also notify the areas, which can be
offered for mining leases. This notification should take place only after the
clearances from the entire concerned Central and State Government
agencies have been obtained. The purpose of the notification is also to seek
the reaction of NGOs and local populace.
The concept of compensatory afforestation has drawn flak as it stipulates
only the number of trees in equivalent area and is silent on the type of trees.
In this connection, the example of Kudremukh comes to mind where rose
wood and sandal wood trees were cut away and acacia, silver oak and

T E R I Report No. 2001EE42

Sustainable development of mining areas

92

eucalyptus were planted under compensatory afforestation. Thus the

superior variety of trees were replaced by inferior ones. Also, the trees
planted may not suit the wildlife of the area.
In Part B of the First Schedule of the MMRD Act, a number of minerals have
been mentioned as atomic minerals. Some of these minerals can perhaps be
brought out of the Schedule and included within the ambit of MCDR and
MCR as proposed by FIMI.
Presently, there is no safeguard against the action of the party that has a
mining lease but does not intend to apply for its renewal though mineable
reserves of the minerals are still available for the renewal period.
Mining industry is in need of funding and therefore, setting up of Mining
Finance Corporation and Mining Areas Infrastructure Boards may be
considered. Such organizations may be funded by diverting a part of royalty
to them. The example of the Government of Maharashtra is relevant in this
case. A Mineral Development Fund has been started to which a part of
royalty is diverted for the development infrastructure in the mining Districts
and also for developing mines.
The rates of royalty and various other taxes on mining sector is too high, and
ways need to be found out to reduce the burden.
It is seen that when a project is announced, local pressure groups become
active against it, based on dis-information. As a result of this, the project
sometimes is abandoned or gets delayed adding to its cost. An element of
transparency should be cultivated so that the informed public opinion can be
created in favour of the project.
FIMI has alleged that some State Governments are adopting a system where
an applicant can not directly obtain mining lease. All the leases are first
granted to the State mining corporation, which then transfers it to the
applicant under MCR Rule 37 (2). This is often done in lieu of consideration
which may be as high as Rs 20 crore in lump sum or an amount equal to the
royalty on production resulting in eroding the profitability of the project.
Some element of legislation is required to be incorporated to safeguard
against this practice.
Procedure for providing exploration data to the prospective parties by the
States and Central governments should be made simple and business
oriented.
In view of very low rates of dead rent, the entrepreneurs are inclined to take
large areas under lease, pre-empting the other interested parties from
applying for concessions. This will have deleterious impact on the growth of

T E R I Report No. 2001EE42

Sustainable development of mining areas

93

the mining industry. Therefore, instead of charging dead rent on the basis of
size, it is felt that a minimum royalty may be fixed on the basis of quantity.
In case of large deposits, mining concessions should be given for the whole
area to a single party which can develop a model mine and fulfil the
requirement of its consuming industry over long periods, instead of granting
to a number of parties creating environmental and other problems.
The regulatory consents, permissions and approvals should be granted for
the term of the mining lease by the concerned authorities and not for any
other specified period.
Though the upper limit of the area of the mining lease is defined, there is no
minimum area stipulated in the legislation. This has resulted in very small
areas being granted mining leases wasting resources in minerals, funds and
efforts.
It is seen that the surface rights are not granted even after the mining lease is
awarded to the party. This causes avoidable delays in commencing
operations and anxiety to the party.

T E R I Report No. 2001EE42

Title of the chapter

List of annexures

Annexure 1
Annexure 2
Annexure 3
Annexure 4
Annexure 5
Annexure 6
Annexure 7
Annexure 8
Annexure 9
Annexure 10

List of mining and mineral companies

List of mining and industry associations
Index of mineral production 1995-96 to 1999-2000
Rates of royalty and dead rent for minerals
Acts, rules and legislations on mineral rights, surface access
environment, foresty etc.
Acts, rules and regulations on labour, trade unions dispute
resolution etc.
List of central trade unions organisations
Campaign against unjust mining by social action groups
List of NGOs working for the cause of environmental and
social justice
List of FIPB Approvals as on 15.10.2001

T E R I Report No. 2001EE42

Annexures

Annexure 1
List of Mining & Mineral Based Companies
S.No

Companies

Minerals / Mineral Products

1.

A.P. Trivedi Sons

Manganese Ore

2.

Adityana Limestone & Quarry Mines

Limestone, quarry mines & cement

3.

Agrawal Graphite Industries

Graphite

4.

Almora Magnesite Ltd.

Magnesite, limestone dead burnt magnesite, cement.

5.

Amrapali & Company

Mining and refining china clay

6.

Anand & Company

Lime, limestone and dolomite

7.

Andhra Phosphate Ltd.

Rock phosphate (apatite), vermiculite (associated mineral)

8.

Andhra Pradesh Mineral Development

Barytes(lumps/powder), black granite, ball clay/washed clay, rock

Corpn.Ltd.

phosphate(apatite) and vermiculite. Development of minerals with

private participation: gold, diamond, bauxite, heavy mineral beach
sands, galaxy granite, low grade iron ore, semi-precious stones and
moulding sand (silica sand)

9.

Apco Mineral Industries

Limestone, dolomite, calcite, china clay

10.

Aruna Industrial Minerals

Feldspar, quartz, graphite, mica, vermiculite, calcite, barytes etc.

11.

Aryan Mining & Trading Corporation Pvt.

Manganese ore and iron ore

12.

Ashapura Minechem Ltd

13.

The Associated Cement Companies Ltd

14.

Associated Stone Industries (Kotah) Ltd.

Kota stone (limestone flooring slabs)

15.

Associated Soapstone Distributing Co.

Soapstone

16.

B.C. Mohanty & Sons Pvt. Ltd.

Chromite ore concentrate

17.

Balaji Produce Company

Iron ore, manganese ore, red oxide and yellow oxide

18.

Bandekar Brothers Pvt. Ltd

Iron and manganese ore

19.

Bansal Khanij Udyog

Bauxite, ochre

20.

Banwarilal Newatia

White and grey limestone, pyrophyllite, soapstone, china clay, quartz,

21.

Bellary Iron Ores Pvt ltd.

Iron ore / high grade iron ore fines of +65% calibrated iron ore

Ltd.
Bentonite, bauxite, barytes, attapulgite, bleaching clay, salt, silica
sand, china clay in semi crushed, crushed or powder form
Cement

Pvt. Ltd.

red and yellow orchre.

22.

Bharat Aluminium Company Ltd

Bauxite, aluminium

23.

Bharat Mines & Minerals

Iron ore and manganese ore

24.

Bihar Sponge Iron Ltd

Sponge iron

25.

Birla Cement Works

Limestone to cement plant

26.

Bombay Minerals Ltd.

(Unit of Birla Corporation Ltd)

Calcined bauxite

27.

Broken Hill Proprietry Company Ltd

Coal, iron ore, zinc, copper etc.

28.

Bussa Associates

Ferrous minerals, alloys and raw materials consultants

29.

Carbon & Graphite Products

Limestone, feldspar, quartz, magnetite, graphite flakes and powder,

fireclay

30.

Cement Corporation of India Ltd

Limestone, cement

31.

Century Cement

Limestone, cement

T E R I Report No. 2001EE42

ii

Annexures
S.No

Companies

32.

Chhabboolal Shivkumar

Minerals / Mineral Products

Red ochre, yellow ochre, red oxide, white earth, bauxite, laterite,
china clay, etc.

33.

Chettinad Cement Corporation Ltd

Cement

34.

Chowgule & Co. ltd

Iron ore and iron ore pellets

35.

D.K.Trivedi & Sons

White, green & black marble

36.

Dalmia Cement (Bharat) Ltd

Iron ore, limestone, magnesite and cement clinker

37.

Deccan Limestone Mining Co (P) Ltd.

Limestone and calcined lime

38.

Deccan Mining Syndicate (P) Ltds

Iron ore, manganese ore and iron ore high grade fines

39.

Dharti Dhan Private Limited

Soapstone

40.

East India Minerals Limited

High grade size calibrated iron ore/iron ore fines

41.

Eastern Minerals

Diaspore in lumps as well as in fines, calcined diaspore, quartz,

calcite, feldspar and granite.

42.

EMCO Goa Pvt. Ltd.

Iron ores (iron ore lumpy fines)

43.

Ecomen Consultants (P) Ltd

Environmental monitoring & consultancy in all minerals

44.

English Indian Clays Ltd.

Processed kaolin (china clay)

45.

Enterprising Enterprises

Granite

46.

Essel Mining & Industries Ltd

Manganese ore, iron ore fines, iron ore

47.

Ferro Alloys Corporation Limited

Ferromanganese, high carbon ferrochrome, medium carbon

ferrochrome and low carbon ferrochrome, charge chrome, chrome
ore

48.

Gandhmardhan Sponge Industries (P)

Iron ore

Ltd.
49.

Gimpex Limited

Barytes, bentonite, feldspar, talc, garnet, etc.

50.

Gujarat Ambuja Cement Ltd

Limestone and marl, Cement

Gujarat Heavy Chemicals Ltd.

Mining for captive consumption

51.

(Lignite Mining Division)

52.

Gujarat Mineral Development Corpn. Ltd

Lignite, bauxite, fluorspar, calcined bauxite

53.

H.R.Gaviappa & Co

Iron ore

54.

H. G. Rangan Goud

Iron ore

55.

Hargovind Pandya & others

Iron ore

56.

Harris Minerals Supply Company

Ochre and clays

57.

Himalaya Stone & Lime Co.

High grade limestone, gypsum and dolomite

58.

Hind-Nippon Rural Industries (P) Ltd

Granite

59.

Hindalco Industries Limited

Bauxite, alumina, aluminium

60.

Hindustan Copper Ltd

Blister copper, copper cathode, copper bar & CC Rod

61.

Hindustan Zinc Ltd

Zinc, lead, cadmium, silver, etc.

62.

Hothur Traders

Iron ore and manganese

63.

Indian aluminium company ltd

Bauxite, aluminous laterite, kaolin, calcined alumina and aluminium

64.

Indian Metals & Ferro Alloys Ltd

Chromite, quartz, magnesite, ferrosilicon, high carbon and medium

65.

The India Cement Ltd

Cement

66.

Indian Rare Earths Ltd

Ilmenite, rutile, leucoxene, zircon (zircon flour and opacifier),

hydrate
carbon ferrochrome and silicon metal

sillimanite, garnet, monazite, rare earths compounds, tri sodium

phosphate (dodecahydrate),thorium nitrate, etc

T E R I Report No. 2001EE42

iii

Annexures
S.No

Companies

Minerals / Mineral Products

67.

Ispat Industries Ltd.

Steel

68.

J.K. Minerals

Manganese ore

69.

Jai Bharat Khanij Udyog

Limestone, chromite, quartz, pyrophyllite, soapstone, bentonite,

etc.`

70.

Jailal Bharatlal

Bauxite, ochre, china clay, laterite

71.

Jagdish Mines & Metals (P) Ltd

China Clay and silica sand

72.

Jain China Clay Mines Private ltd

China clay

73.

Jay Minerals

Bentonite, calcite, talc (soapstone), china clay available in

74.

Jayant Quarry Works

Aggregate for construction/marble

micronised and also in coated foam

75.

Jayaswals Neco Ltd.

Pig iron

76.

Jindal Steel & Power Limited

Sponge iron, M.S. Slabs and high carbon ferro chrome

77.

K.C. Pradhan

Iron ore, manganese ore, limestone, dolomite and fireclay

78.

K.L. Poddar & Sons (P) ltd

Calibrated iron ore, manganese ore, cement grade limestone

79.

K.M. Mehte

Bauxite

80.

K.M. Parvathamma

Iron ore in lumps, fines and in concentrates and red oxide of iron

81.

Kailash Marketing Associates

Ceramic, glass and refractory industries

82.

Kamaljeet Singh Ahluwalia

Iron ore and manganese ore

83.

Kariganur Mineral Mining Industry

Super high grade iron ore, HAD lumps, high grade fines and

84.

Kudremukh Iron Ore Company Ltd

Mining beneficiation of iron ore concentrate/ production of pellets.

85.

Larsen & Toubro Ltd

Limestone and cement

mineral (both in lumpy and powder form of 300 mesh).

calibrated iron ore to sponge iron plants.

(Awarpur Cement Works)

86.

Libbi Mines (P) Ltd

Iron ore

87.

Lakshmi Cement

Cement

88.

M.G. Mohanty

89.

Madhya Pradesh State Mining

Rock phosphate, dolomite, bauxite, pyrophyllite, diaspore, tin,

Corporation Ltd

corrundum, granite, sand

90.

Maihar Cement

Cement

91.

Mangalore Mineral Traders

Washed and unwashed silica sand and resin coated sand.`

92.

Manganese ore (India) ltd

Manganese ore of all grades, manganese dioxide ore of all grades,

(A divn. Of JK Corpn. Ltd.)

Iron ore: (a) sponge plant grade (+68% Fe content Heamatite), (b)
blast furnace grade (c) Manganese ore

high carbon ferro manganese (78% manganese), electrolytic

manganese dioxide
93.

Manikgarh Cement limestone Mines

Cement

94.

Mehboob Transports Company

Iron ore

95.

Mekal Minerals

Ochres, White earth, bauxite, laterite

96.

MMTC Ltd

Super star trading house

97.

MSPL Ltd

Iron ore

98.

Mine Chemie Corp.

Bentonite, fullers earth, barytes

99.

Misrilall Jain & Sons

Iron ore, chromite, dolomite, graphite, manganese

100.

Mohan Bhai Minerals Pvt. Ltd

Mining and providing earth moving equipment

101.

Mukunda Shenoy Nagar

Consultancy

T E R I Report No. 2001EE42

iv

Annexures
S.No

Companies

Minerals / Mineral Products

102.

Mysore Cements Ltd

Cement

103.

Nagri Mining Co. Ltd

Manganese ore

104.

Nalwaya Mineral Industries Pvt. Ltd

Soapstone

105.

Narmada Cement Company Ltd

Cement

106.

National Aluminium Company Ltd

Bauxite, alumina hydrate, calcined alumina and aluminium

107.

National Enterprises

Iron ore, manganese ore and bauxite ore

108.

National Mineral Development

Iron ore, diamonds

(A Subsidiary of Larsen & Toubro Ltd)

Corporation Ltd
109.

Neogy & Sons

Ochre

110.

New India Mining corporation Private ltd

Old iron ore mines owner of west coast of arabian sea in state of
maharastra, India

111.

Orissa Minerals Development Co. Ltd

Iron ore and manganese ore

112.

Orissa Mining Corporation Ltd

Iron, manganese, chromite, limestone, gemstone, decorative stone,

113.

Patnaik Minerals pvt ltd

iron ore, manganese ore

114.

Phulad Mines and Minerals Pvt ltd

Magnesite/ calcined magnesite

115.

Prabhudas Vithaldas

Bauxite ore, limestone, red ochre, whiting chalk,china clay,

bauxite, china clay, vanadiferous titaniferous magnetite etc.

limestone and dolomite

bentonite, calcite, abrasives, calcined minerals etc.

116.

Prabhudayal Agrawal

Quartz, quartzite, silica sand, fireclay, china clay, chromite,

manganese and titaniferous magnetite

117.

Pyrites Phosphates & Chemicals Ltd

Pyrites

118.

Rajashree Cement

Cement

119.

Rajasthan Barytes Ltd

Barytes, calcite and soapstone

120.

Rajasthan State Mineral Development

Gypsum, limestone (all grades), granite, rock phosphate, graphite,

Corpn. Ltd

fluorspar, lignite

Rajasthan State Mines & Minerals Ltd

Rock Phosphate, gypsum, SMS grade limestone, green marble and

(A unit of Grasim Industries Ltd)

121.

lignite
122.

Rana Hanuman Singh Minerals

Dolomite and manganese ore

123.

Rashtriya Ispat Nigam ltd /

Captive mines of dolomite, limestone, manganese and river sand /

Visakhapatnam Steel Plant

steel, pig iron, project engineering and consultancy

124.

Resources International

Iron ore

125.

Rio Tinto India Pvt ltd

Mineral exploration, iron ore, coal etc.

126.

Rungta Mines ltd

Iron ore-BF and sponge grade blue dust, crushed fines, manganese
ore BF and ferromanganese grade, dioxide and fines, limestone,
dolomite, fire clay, bauxite, soapstone

127.

S.B. Minerals

SHG lumps, calibrated ore, SHG fines

128.

S.K. Jhanjhri

Mica

129.

S.K. Sarawagi & Co. Pvt Ltd

Manganese and iron ores in all grades and sizes

130.

Salgaocar Mining Industries Ltd

Iron ore

131.

Sanghi industries Ltd

Lime stone and cement

(Cement Division)
132.

Sangrah Mines & Minerals

T E R I Report No. 2001EE42

N.A

Annexures
S.No

Companies

Minerals / Mineral Products

133.

Sandur Manganese & Iron Ores Ltd

Manganese ore and iron ore

134.

Dr. Sarojini Pradhan

Iron, manganese, graphite, limestone and dolomite

135.

Satya Narayan Paul

Manganese ore of various grade

136.

Sesa Group of Companies

Production, processing and export of iron ore, shipping and ship

building, manufacture of iron ore processing equipments, production
of pig iron, production of metallurgical coke.

137.

Shabro Intrade Pvt ltd

Exports/importer of ferro alloys and other mineral products

138.

Shree Bhagwati mines & Stone

Quartzite, silica sand

139.

Shree Pratap Commercial Co. Pvt. Ltd

Asbestos, mica, quartz, felspar

140.

Singbhum Mineral Co.

China clay, manganese ore, iron ore

141.

Sociedade de fomento industrial ltd

Production/exports of ferroalloys/ refractories

142.

Steel Authority of India Ltd

Iron ore, limestone, dolomite

143.

Stone and Mineral Associates ltd

Marble blocks and slabs

Processing (Raj.) Pvt. Ltd

144.

Sukhdeo Prasad Goenka

Low silica limestone, low silica dolomite, graphite, manganese.

145.

Surendra Nath Mohanty

Iron ore, manganese ore, bauxite, fireclay, quartz and quartzite

146.

T.P. Minerals (P) Ltd

Natural Crystalline graphite, manganese ore

147.

Tamilnadu Magnesite Ltd

Magnesite & dunite

148.

Tamilnadu Minerals Ltd

Granite dimensional blocks and granite finished products,

vermiculite & exfoliated vermiculite, quartz & feldspar, limestone,
limeshell, silica sand, fireclay, Indian standard sand & graphite

149.

Tata Chemicals Ltd

Limestone, soda ash and cement

150.

Tata Iron And Steel Comp Ltd

Iron ore, coal, manganese ore, dolomite, chrome ore,

magnesite/dunite, limestone, finished steel (including saleable
steel)

151.

The KCP Limited

Limestone

152.

The Madras Aluminium Company Ltd

Aluminium

153.

Timblo ltd

Iron ore fines and lumps

154.

Transworld Garnet India Pvt Ltd

Garnet sands

155.

Tribeni Prasad Rungta

Magnetite, dolomite, soap-stone, graphite, granite.

156.

Trident Minerals

Iron ore

157.

Trimex industries ltd

Mine owners, processors and exporters of barytes, bauxite,

bentonite, feldspar, mica, quartz, iron ore, garnet sand, hematite,
granite and stone producers.

158.

Tungabhadra Minerals Pvt Ltd

Iron ore

159.

Udaipur Mineral Development Syndicate

Soapstone

160.

V.M. Salgaocar and Bro. Ltd

(P) ltd
Iron ore

161.

V.S. Dempo & Co. Pvt. Ltd

Processed iron ore

162.

VBC Ferro Alloys Ltd

Ferrosilicon, ferrochrome

163.

Vibhuti Gudda Mines Private Ltd

Iron ore lumps of basic grade and super high grade fines of +65%
calibrated ore.

164.

Visa Industries ltd

Mineral beneficiation plant

165.

Vijayanagar Minerals (P) ltd

Steel

166.

West-End Minerals and Exports (P) ltd

Iron and manganese ores

T E R I Report No. 2001EE42

Annexures

vi

S.No

Companies

Minerals / Mineral Products

167.

Wolkem India Ltd

Wollastonite and calcite minerals

Central public sector companies with Coal & Lignite

1.

Coal India Ltd.

6.

Western Coal fields Ltd

2.

Eastern Coal fields Ltd

7.

South Eastern Coal fields Ltd

3.

Bharat Coling Coal Ltd

8.

Mahanadi Coal fields Ltd

4.

Central Coal fields Ltd

9.

Neyveli Lignite Corporation Ltd

5.

Northern Coal fields Ltd

Fertiliser companies
1.

Coromandel Fertilizers Ltd.

16. Nuchem Ltd.

2.

DCM Shriram Industries Ltd.

17. Paharpur Fertilizers and Chemicals Ltd.

3.

Gujarat Heavy Chemicals Ltd.

18. Paradeep Phosphates Ltd.

4.

Gujarat Narmada Valley Fertilizers Co. Ltd.

19. Power Finance Corporation Ltd.

5.

Hindustan Fertilizer Corporation Ltd.

20. Power Grid Corporation Ltd.

6.

Indian Organic Chemicals Ltd.

21. Punjab Alkalies and Chemicals Ltd.

7.

Kanoria Chemicals and Industries Ltd.

22. Punjab Chemicals and Pharmaceuticals Ltd.

8.

Khaitan Chemicals and Fertilizers Ltd.

23. Rashtriya Chemicals and Fertilizers Ltd.

9.

KRIBHCO

24. Shriram Fertilizers and Chemicals

10. Liberty Phosphate Ltd.

25. Shriram Foods and Fertilizer Industries

11. Madras Fertilizers Limited

26. Surat Electricity Company Ltd.

12. Mangalore Chemicals and Fertilizers Ltd.

27. The Dharamsi Morarji Chemical Co. Ltd.

13. Modi Alkalies and Chemicals Ltd.

28. Fertilizers and Chemicals Travancore Ltd.

14. Nagarjuna Fertilizers and Chemicals Ltd.

29. The Fertilizers Corporation of India Ltd.

15. National Organic Chemical Industries Ltd.

Iron and Steel Companies

1.

Bellary Steels & Alloys Ltd

6.

VS Dempo & Co Ltd

2.

Indian Metals & Ferro Alloys Limited

7.

SESA Goa Ltd

3.

USHA Martin Industries Ltd

8.

Usha Ispat Ltd

4.

Nippon Denso Ispat Limited

9.

Malvika Steel Ltd

5.

Steel Authority of India Ltd

Cement Companies
1.

Ambuja Cement Eastern Limited

11. Gujarat Sidhee Cement Limited

2.

Ambuja Cement Rajasthan Limited

12. IDCOL Cement Limited

3.

Andhra Cements Limited

13. Indo-Rama Cement Limited

4.

Birla Corporation Limited

14. J K Cement Works

5.

Cement Corporation of India Limited

15. J K Udaipur Udyog Limited

6.

Chettinad Cement Corporation Limited

16. Jammu and Kashmir Cements Limited

7.

Dalmia Cement (B) Limited

17. Jaypee Rewa Cement

8.

Diamond Cements

18. Kalyanpur Cements Limited

9.

Grasim Cement

19. Kanoria Industries Limited

10. Grasim Industries Limited (Cement Division)

T E R I Report No. 2001EE42

20. Kesoram and Vasavdatta Cement

Annexures

vii

21. Lafarge India Limited

35. Penna Cement Industries Limited

22. Lakshmi Cement

36. Prism Cement

23. Larsen and Toubro Limited

37. Priyadarshini Cement Limited

24. Madras Cements Limited

38. Rajashree Cement

25. Maihar Cement

39. Saurashtra Cement Limited

26. Malabar Cements Limited

40. Shree Digvijay Cement Company Limited

27. Mangalam Cement

41. Shriram Cement Works

28. Manikgarh Cement

42. Sri Vishnu Cement Limited

29. Mawmluh Cherra Cements Limited

43. Tamil Nadu Cements Corporation Limited

30. Mysore Cements Limited

44. The K C P Limited

31. Narmada Cement Company Limited

45. Vasavdatta Cement

32. OCL India Limited

46. ZUARI Cement

33. Orient Cement

47. Binani Cement Limited

34. Panyam Cements and Mineral Industries Limited

48. India Cements Limited

T E R I Report No. 2001EE42

viii

Annexures

Annexure 2
List of mining & mineral based association
S.No

Association

Minerals / Mineral products

1.

All India Granites & Stone Association

Granites and dimension stones

2.

Ambaji Marble Quarry and Factory Association

Marble

3.

Banspani Mine Owners Association

N.A

4.

Cement Manufacturers Association

Cement

5.

Chhattisgarh Mineral Industries Association

N.A

6.

Chotanagpur Bauxite Mineowners Association

Bauxite

7.

Eastern Mining Association

Iron ore, manganese ore, china clay, limestone,

bauxite

8.

Federation of Mining Association of Rajasthan

All types of industrial minerals and dimensional

9.

Goa Mining Association

Iron ore and manganese ore

10.

Goa Mineral Ore Exporters Association

Iron ore, manganese, bauxite and ferromanganese

11.

Gujarat Mineral Industry Association

Association of mine owners, mineral dealers and

stones.

mineral based industry

12.

The Indian Ferro Alloy Producers Association

Ferro alloys

13.

Indian Soapstone Producers Association

Soapstone

14.

Kodarma Mica Mining Association

Mica

15.

Marble Gangsaws & Tiles Plants Association

N.A

16.

Mineral Merchants & Manufacturers Association of

N.A

17.

Mineral Industry Association

Manganese ore

18.

Tamilnadu Granite Quarry Owners & Exporters

Granites

India

Association
19.

The Thane Quarry Owners Welfare Association

N.A

20.

Federation of Indian Mineral Industry

All Minerals

Other Industry Associations

9.

Indian Non-ferrous Metals Manufacturers

1.

Orga Name

2.

Asbestos Cement Products Manufacturers

Association

10. Indian Paper Manufacturers Association

3.

Chemicals and Petrochemicals Manufacturers

11. Indian Pulp and Paper Technical Association

Association

12. Pig Iron Manufacturers' Association of India

4.

Cold Rolled Steel Manufacturers Association of

13. Process Plant & Machinery manufacturers

5.

Federation of Indian Mineral Industries

6.

Fertiliser Association of India

7.

Indian Chemical Manufacturers Association

15. Sponge Iron Manufacturers Association

8.

Indian Ferro Alloy Producers Association (THE)

16. Cement Manufacturers Association

India

T E R I Report No. 2001EE42

Association

Association of India
14. Society of Indian Automobile Manufacturers
(SIAM)

ix

Annexures

Annexure 3
Index Of Mineral Production 1995 - 96 To 1999 - 2000
Base 1993 - 94 = 100
Mineral

Weight

95 - 96

96 - 97

97 - 98

98 - 99

99 - 00

All minerals

1000.00

121.68

120.78

126.78

125.42

126.79

Fuel

857.180

121.30

120.77

127.08

125.65

126.50

Coal mining

324.628

110.62

115.57

119.75

118.18

120.67

Coal

307.610

109.94

115.04

119.29

117.52

120.63

17.018

122.97

125.17

128.01

130.05

121.32

Pet. & nat. Gas

532.552

127.80

123.94

131.55

130.20

130.05

Natural gas ( u )

134.182

128.08

130.51

150.21

157.32

164.53

Petroleum ( crude )

398.370

127.71

121.73

125.27

121.07

118.44

Mcdr '88 minerals

123.092

115.33

115.62

121.18

120.11

125.39

80.765

114.53

113.23

120.58

116.92

119.00

Bauxite

3.877

100.54

109.78

110.36

119.42

123.84

Chronite

11.017

159.63

136.74

142.32

133.20

159.30

Copper ore

8.352

94.57

77.77

90.13

84.45

62.30

Gold

5.363

98.12

139.37

137.16

129.30

117.69

38.428

113.03

114.28

126.96

121.10

123.19

Lead cong

1.650

114.38

111.92

113.06

116.70

116.74

Manganese ore

6.122

108.29

110.30

96.81

90.66

92.30

Tin

0.055

43.18

24.49

30.90

30.93

17.91

Tungsten

0.004

122.95

72.92

0.00

0.00

0.00

Zinc conc.

5.897

99.63

95.46

100.82

120.60

124.05

42.327

116.87

120.19

122.33

126.18

137.58

Agate

0.002

74.76

55.17

32.97

21.24

16.55

Apatite

0.053

87.32

74.11

87.93

113.68

94.33

Asbestos

0.069

57.15

65.14

52.39

48.20

43.87

Ball clay

0.134

138.12

133.91

123.29

122.14

109.98

Barytes

1.084

84.11

72.54

86.08

125.56

38.87

Calcareous sand

0.089

141.33

48.81

14.47

6.36

0.00

Calcite

0.080

105.53

52.62

73.01

87.45

83.87

Chalk

0.105

134.64

112.74

104.97

108.43

128.00

Clay ( others )

0.006

177.55

163.81

221.84

226.13

487.19

Corundum

0.010

6.84

18.15

4.56

3.90

0.09

Corundum ( ruby )

0.002

741.38

579.31 1397.31

0.00

0.00

Lignite

Met. Minerals

Iron ore

N. Met. Minerals

T E R I Report No. 2001EE42

Annexures

Mineral

Weight

95 - 96

96 - 97

97 - 98

98 - 99

99 - 00

Diamond

0.471

155.71

165.62

161.24

179.90

211.56

Diaspore

0.059

90.89

131.42

61.46

82.47

95.26

Dolomite

3.082

107.96

100.74

86.86

84.85

83.49

Dunite

0.037

991.91

918.55 1120.81

1331.50

1328.40

Felsite

0.003

122.72

125.41

153.63

68.15

68.05

Felspar

0.042

122.72

116.69

128.78

133.50

185.65

Fireclay

0.170

105.84

95.06

105.23

109.79

86.20

Fluorite ( cons. )

0.643

100.75

87.50

49.79

0.21

0.97

Fluorite ( graded )

0.056

93.12

116.65

125.37

91.44

1087.05

Fusch . Quartzite

0.000

11.04

0.65

0.00

126.62

45.45

Garnet ( abrasive )

0.044

128.79

87.42

159.04

275.11

394.27

Garnet ( gem )

0.000

71.58

77.76

89.23

112.96

87.63

Graphite

0.113

162.30

140.27

131.34

161.59

129.62

Gypsum

1.199

130.23

131.11

130.25

134.51

195.06

Jasper

0.005

86.03

91.05

100.13

100.25

98.00

Kaolin

1.539

128.84

120.18

122.59

114.80

116.63

Kyanite

0.023

83.31

65.16

56.52

57.13

60.40

Laterite

0.102

148.89

145.52

130.13

130.75

161.92

Limekankar

0.036

249.03

267.77

307.26

204.49

167.67

Limeshell

0.083

107.23

80.96

83.27

92.85

92.30

Limestone

25.010

116.44

123.53

132.81

136.81

153.79

Magnesite

1.127

92.12

100.78

99.71

93.39

88.04

Mica ( crude )

0.078

86.17

91.91

79.82

69.80

59.88

Ocher

0.073

171.28

159.28

176.95

185.46

202.13

Perlite

0.001

177.95

122.05

31.50

81.50

150.79

Phosphorite

4.488

126.37

129.48

110.25

121.89

109.66

Pyrites

0.073

122.61

124.87

109.11

77.16

8.29

Pyrophyllite

0.063

155.94

153.35

111.53

99.51

124.84

Quartz

0.092

78.42

100.43

117.75

143.14

127.88

Quartzite

0.087

123.51

118.22

32.47

48.00

66.61

Salt ( rock )

0.009

58.94

87.10

90.35

84.10

90.71

Sand ( other )

0.192

119.29

113.71

142.61

179.23

145.04

Shale

0.021

157.42

242.80

319.14

424.25

405.26

Silica sand

0.620

60.26

80.97

76.28

90.32

165.74

Sillimanite

0.120

73.95

69.41

101.39

98.67

121.56

Slate

0.008

96.70

78.05

106.26

96.85

98.13

Steatite

0.731

128.32

126.10

112.65

114.31

125.26

T E R I Report No. 2001EE42

xi

Annexures

Mineral

Weight

95 - 96

96 - 97

97 - 98

98 - 99

99 - 00

Vermiculite

0.010

77.43

175.02

202.37

184.07

120.24

Wollastonite

0.133

154.79

156.91

157.57

152.67

188.43

19.728

148.41

148.41

148.41

148.41

148.41

Granite

9.790

135.27

135.27

135.27

135.27

135.27

Marble

9.008

169.98

169.98

169.98

169.98

169.98

Slate

0.930

77.75

77.75

77.75

77.75

77.75

Minor minera;s

T E R I Report No. 2001EE42

xii

Annexures

Annexure 4
Rates of Royalty and Dead Rent for Minerals
Ministry Of Mines
Notification
New Delhi, the 12th September, 2000
G.S.R. 713(E).- In exercise of the powers conferred by sub-section (3) of section 9 of the Mines
and Minerals (Development and Regulation) Act, 1957 (67 of 1957), the Central Government
hereby makes with immediate effect, the following further amendments to the Second Schedule to
the said Act, namely :In the Mines and Minerals (Development and Regulation) Act, 1957, for the Second Schedule, the
following Schedule shall be substituted, namely :"THE SECOND SCHEDULE"
(See section 9)
Rates of royalty in respect of minerals at item 1 to 10 and 12 to 38 and 40 to 51 applicable in all
states and union territories except the state of West Bengal.
1. Agate

Ten percent of Sale price on advelorem basis.

2. ( i ) Apatite

Five percent of Sale price on advelorem basis.

(ii) Rock Phosphate

(a) above 25 per

Eleven per cent of sale price on ad valroem basis

cent P2O5
(b)upto 25 per

Five per cent of sale price on ad valroem basis

cent P2O5
3. Barytes

Five and half per cent of sale price on ad valorem basis

4.Bauxite, Laterite

Zero point three five percent of London Metal Exchange

Aluminium Metal Price Chargeable on the contained
Aluminium Metal in Ore produced

5.Brownilmenite (Leucoxene,

Two per cent of sale price on ad valorem basis

Ilmenite,Rutile and Zircon)

6. Cadmium

Ten per cent of sale price on ad valorem basis

7. Calcite

Fifteen per cent of sale price on ad valorem basis

8. Chromite

Seven and half per cent of sale price on ad valorem basis

9. Copper

Three point two per cent of London Metal Exchange Copper

metal price chargeable on the contained copper metal in
ore produced

10. Corundum

Ten per cent of sale price on ad valorem basis

11. Diamond

Ten per cent of sale price on ad valorem basis

12. Felspar

Ten per cent of sale price on ad valorem basis

T E R I Report No. 2001EE42

Annexures

xiii

13. Fire Clay (Including Plastic, pipe,

Twelve per cent of sale price on ad valorem basis

lithomargic and natural pozzolanic clay)

14. Fluorspar (also called fluorite)
15. Garnet

Five per cent of sale price on ad valorem basis

(a) abrasive

Three per cent of sale price on ad valorem

Ten per cent of sale price on ad valorem

(b) Gem
16. Gold

(a) Primary

(a) One and half per cent of London bullion market

association price(commonly refered to as "London price")
chargeable on the contained Gold metal in ore produced
(b) Two and half per cent of London bullion market
association price(commonly refered to as "London price")
chargeable on the by product Gold metal actually produced

(b) By-product
17. Gypsum

twenty per cent of sale price on ad valorem basis

18. KYANITE

Ten per cent of sale price on ad valorem basis

19. Lead

Five per cent of London Metal Exchange lead metal price

chargeable on the contained lead metal in ore produced

20. MAGNESITE
21. Manganese Ore

Three per cent of sale price on ad valorem basis

(a) Ore of all

Three per cent of sale price on ad valorem basis

grades
(b) Concentrates

One per cent of sale price on ad valorem basis

22. Crude Mica, Waste and Scrap mica

Four per cent on sale price on ad valorem basis

23. Nickel

Zero point one two percent of London Metal Exchange nickel

metal price chargeable on contained nickel metal in ore
produced

24. Pyrites

two per cent of sale price on ad valorem basis

25. Pyophyllite

Fifteen per cent of sale price on ad valorem basis

26. Ruby

Ten per cent of sale price on ad valorem basis

27. Selenite

Ten per cent of sale price on ad valorem basis

28. Sillimanite

Two and half per cent of sale price on ad valorem basis

29. Silver

(a) By products

Five per cent of London Metal Exchange silver metal price

chargeable on by product silver metal actually produced
Five per cent of london metal Exchange Silver metal price
chargable on the contained silver metal in ore produced

(b) Primary silver

30. Talc, Steatite and Soapstone

Fifteen per cent of sale price on ad valorem basis

31. Tin

Five per cent of london metal Exchange Tin metal price

chargable on the contained Tin metal in ore produced.

32. Vermiclite

Three per cent of sale price on ad valorem basis

33. Wollastonite

Ten per cent of sale price on ad valorem basis

34. Zinc

Six point six per cent of London metal Exchange Zinc metal

T E R I Report No. 2001EE42

xiv

Annexures

price chargeable on contained zinc metal in ore produced

35. All other minerals not here-in-before

Ten per cent of sale price on ad valorem basis

specified
* Rates of royalty in respect of item 11 relating to Coal Including Lignite as revised vide
notification number G.S.R. 748 (E), dated the 11th October, 1994 and notification number G.S.R.
27 (E), dated the
13th January, 1995 of Government of India, Ministry of Coal will remain in force until revised
through a separate notification by the Ministry of Coal.
** Rates of royalty in respect of item 39 relating to Sand For Stowing as revised vide notification
number G.S.R. 214(E) dated the 11th April, 1997 will remain in force until revised through a
separate notification by the Ministry of Coal.
Note : The rates of royalty for the State of West Bengal in respect of the minerals except the
mineral specified against item No.11 shall remain the same as specified in the notification of the
Government of India in the Ministry of Steel and Mines (Department of Mines) number G.S.R.
458 (E), dated the 5th May, 1987."
(F. No. 3/4/98-MVI)

(S. P. GUPTA)
JOINT SECRETARY TO GOVERNMENT OF INDIA
Note : The Second Schedule was amended earlier vide notification numbers.:1. GSR No. 175(E) dated 31st March, 1975.
2. GSR No. 407(E) dated 14th July, 1975.
3. GSR No. 584(E) dated 13th December, 1975.
4. GSR No. 321(E) dated 12th June, 1978.
5. GSR No. 2(E) dated 1st January, 1979.
6. GSR No. 67(E) dated 13th February, 1979.
7. GSR No. 63(E) dated 12th February, 1981.
8. GSR No. 449(E) dated 23rd July, 1981.
9. GSR No. 458(E) dated 5th May, 1987.
10. GSR No. 856(E) dated 14th October, 1987.
11. GSR No. 516(E) dated 1st August, 1991.
12. GSR No. 100(E) dated 17th February, 1992.
13. GSR No. 748(E) dated 11th October, 1994.
14. GSR No. 27(E) dated 13th January, 1995.
15. GSR No. 214(E) dated 11th April, 1997.
----------------------------------------------------------------------------------------

T E R I Report No. 2001EE42

xv

Annexures

[TO BE PUBLISHED IN THE GAZETTE OF INDIA, EXTRAORDINARY, PART-II, SECTION 3,

SUB-SECTION(i)]
MINISTRY OF MINES
NOTIFICATION
New Delhi, the 12th September, 2000
G.S.R. 714(E).- In exercise of the powers conferred by sub-section (2) of section 9A of the Mines
and Minerals (Development and Regulation) Act, 1957 (67 of 1957), the Central Government
hereby makes with immediate effect, the following amendments to the Third Schedule to the said
Act, namely :In the Mines and Minerals (Development and Regulation) Act, 1957, for the Third Schedule, the
following Schedule shall be substituted, namely :"THE THIRD SCHEDULE
(See section 9A)
RATES OF DEAD RENT
(APPLICABLE FOR ALL STATES AND UNION TERRITORIES EXCEPT THE STATE OF WEST
BENGAL)
1) The rates of dead rent applicable to the leases other than those obtained for supply of raw
material to the industry owned by the concerned lessee :
(Rates of Dead Rent in Rupees per hectare per annum)
1st year of

2nd to 5th year of

6th to 10th year of

11th year of the

Item

Category of The mining

Number

lease

the lease

the lease

the lease

lease and onwards

(a)

Lease are upto 50

Nil

70

140

200

Nil

100

200

280

Nil

140s

230

350

hectares
(b)

Lease area above 50

hectares

but

not

exceeding 100 hectares

( c)

Lease area above 100

hectares

2) In the case of lease obtained for the supply of raw material for the industry owned by the
concerned lessee, the rates of dead rent would be applicable as given in respect of item number (a)
above, irrespective of the lease area and the value of mineral.
3) One and half times the rates specified in item numbers (a), (b) and (c) above in case of leases
granted for medium value mineral(s).

T E R I Report No. 2001EE42

xvi

Annexures

4) Two times the rates specified in item numbers (a), (b) and (c) above in case of leases granted for
high value mineral(s).
Note : For the purpose of this notification,(1) (a) "high value minerals" means gold, silver, diamond, ruby, sapphire, emerald and all other
gemstones (precious, semi-precious stones), copper, lead, zinc, asbestos (chrysotile variety),
corundum, mica.
(b) "medium value minerals" means agate, chromite, manganese ore, sillimanite, vermiculite,
magnesite, wollastonite, perlite, diaspore, apatite and rock phosphate, fluorspar (or fluorite),
barytes.
(c) "low value minerals" means minerals other than high value minerals and medium value
minerals.
(2) the rates of dead rent for the State of West Bengal shall remain the same as specified in the
notification of the Government of India in the Ministry of Steel and Mines (Department of Mines)
No. G.S.R. 458(E), dated the 5th May, 1987.".
(F. No. 3/4/98-MVI)

(S. P. GUPTA)
JOINT SECRETARY TO GOVERNMENT OF INDIA
Note : The Third Schedule was amended earlier, vide notification numbers:1. GSR No. 458(E), dated 5th May, 1987.
2. GSR No. 856(E), dated 14th October, 1987.
3. GSR No. 214(E), dated 11th April, 1997.

T E R I Report No. 2001EE42

xvii

Annexures

Annexure 5
Acts, Rules, Regulations and Orders
Category One: relating to and/or impacting on the ownership of minerals, the granting of rights
to prospect for and exploit minerals, and rights of surface access, environment, forestry,
reclamation and rehabilitation, and local communities.
Acts/Rules/Regulati
ons
The Mines and
Minerals (Regulation
and Development) Act
The Coal Bearing
Areas (Acquisition
and Development) Act

Promulgation

Amendment

Brief Content

1957

1986,
1994, 1999

The Act provides for regulation of prospecting, grant of lease and for
mining operations under the control of the Central Government.

1957

Mineral Concession
Rules

1960

Coal Mines
(Nationalisation) Act

1973

The Coal Mines

(Conservation and
Development) Act
The Coal Mines
(Nationalisation)
Amendment Act

1974

The Land Acquisition

Act

1894

The Indian Forest Act

1927

The Forest

1980

An Act to establish, in the economic interest of India, greater public

control over the coal mining industry and its development by
providing for acquisition by the State of unworked land containing or
likely to contain coal deposits or of rights in or over such land for the
extinguishment or modification of such rights by accruing virtue of
any agreement, lease, license or otherwise or for matters connected
therewith.
These rules lay down the complete code in respect of grant and
renewal of prospecting licenses as also for lease in respect of lands
belonging to the state as well as belonging to private individuals.
An Act to provide for the acquisition and transfer of the right, title and
interest of the owners in respect of the coal mines specified in the
schedule with a view to re-organising and reconstructing such coal
mines so as to ensure the rational, co-ordinated and scientific
development and utilisation of coal resources consistent with the
growing requirements of the country, in order that the ownership and
control of such resources are vested in the State and thereby so
distributed as best to sub-serve the common good, and for matters
connected therewith or incidental thereto.
An Act to provide for conservation of coal and development of coal
mines and for matters connected therewith or incidental thereto.

1993

T E R I Report No. 2001EE42

Amendment
by various
State
Government

The Act stipulates that on and from the commencement of the Coal
Mines Nationalisation Act 1976, (a) no person other then a company
engaged in:
i) the production of iron and steel
ii) generation of power
iii) washing of coal obtained from a mine or
iv) such other use as the Central Government may by notification
specify.
shall carry on coal mining operation in India, in any form.
An act for the acquisition of land needed for public purposes and
companies and determination of compensation to be made on such
acquisition
An Act which consolidates the law relating to forests, the transit of
forest produce and the duty leviable on timber and other forest
produce.
An Act to provide for the conservation of forests and matters

xviii

Annexures
Acts/Rules/Regulati
ons
(Conservation) Act
including Rules

Promulgation

Water (Prevention and

Control of Pollution)
Act
The Water (Prevention
and Control of
Pollution) Rules
Water (Prevention and
Control of Pollution)
Cess Act

1974

The Water (Prevention

and Control of
Pollution) Cess Rules

1978

Air (Prevention and

Control of Pollution)
Act

1981

The Air (Prevention

and Control of
Pollution) Rules
Environment
(Protection) Act

1982

The Environment
(Protection) Rules
The Hazardous
Wastes (Management
and Handling) Rules
Manufacture, Storage
and Import of
Hazardous Chemical
Rules
Constitution of India

1986

1975

Amendment

1988

1977

1986

1989

1989

1950

T E R I Report No. 2001EE42

1994

Brief Content
connected therewith. This Act is in line with the overall national
objective of preserving and as a matter of fact, enhancing the forest
cover. It has the stringent provision that no forest land may be
diverted for non-forest use without prior approval of the Central
Government. It lays down conditions for diversion of forest land for
non-forest purposes including compensatory afforestation.
The Act aims at prevention and control of water pollution as well as
restoration of water quality through the establishment of State
Pollution Control Boards.
The Rules are framed pursuant to the Act of 1974 to prevent and
control water pollution and for maintaining or restoring
wholesomeness of water.
The Act is an evolving piece of legislation for and collecting cess on
water consumed by certain specified categories of industry. Local
Authorities may also specify categories of such industry. The Cess
collected is to be used by CPCB & SPCBs to prevent and control
water pollution.
The Rules are framed under the Cess Act of 1977 for the levy and
collection of a cess on water consumed by persons carrying on
certain industries and by local authorities to augment resources of
the PCBs.
An Act to provide for the prevention, control and abatement of air
pollution, and for the establishment, with a view to carrying out the
aforementioned purposes, of Boards, for conferring on and assigning
to such Boards powers and functions relating thereto and for matters
connected therewith.
The Rules are framed under the Act of 1981 detailing measures for
prevention, control and abatement of air pollution.
Although there are existing legislations dealing directly or indirectly
with several environmental matters, it is necessary to have a general
legislation for environmental protection. Existing laws generally focus
on specific types of pollution or on specific categories of hazardous
substances. Some major areas of environmental hazards are not
covered. There are inadequate linkages in handling matters of
industrial and environmental safety.
This is an umbrella Act providing for the protection and improvement
of the environment.
The Rules framed pursuant to the Act of 1986 provides for the
protection and improvement of the environment.
The Rules make provision for management and handling of
Hazardous Wastes; various restrictions; the responsibilities of the
Occupier and role of PCB.
The Rules prescribe the duties of Occupier; independent safety audit
and restriction on industrial activity involving hazardous chemicals.

xix

Annexures

Annexure 6
Category Two: relating to and/or impacting on labour, trade unions,
compensation, safety and health in the workplace, welfare outside the
workplace, compensation, etc
Acts/Rules/Regulations
The Mines Act

Promulgation
1952

Amendment
1983

Mines Rules

1955

1978, 1986

Coal Mines Regulations

1957

1961,62,63,
64,65,67,68,
69, 70,71, 72,
73, 74, 77, 78,
85 and 90

The Contract Labour

(Regulation and Abolition) Act
The Explosive Act

1970
1884

1978

Motor Vehicle Act

1939

1988
1994

T E R I Report No. 2001EE42

Brief Content
The Act seeks to regulate the working
conditions in mines by providing for
measures to be taken for the safety of
workers employed in them and certain
amenities for them.
The Rules deal with appointment and
qualification of certifying surgeons;
medical examination of persons
employed; appointment of Workmens
Inspector; constitution of Safety
Committee; provision of first aid and
medical appliances; weekly day of
rest; compensatory day of rest;
persons holding position of
supervision or management; leave
with wages; welfare amenities eg.
Shelters, canteen; duties of welfare
officer etc.
The Regulations prescribe the various
returns and notice to be given and
records to be maintained. The
regulations further lay down manner of
examination for grant of various
competency certificates by
government; the qualification and
conditions of appointment of
inspectors, surveyors engineers under
and assistant manager and manager;
duties and responsibilities of
workmen, competent persons and
officials; maintenance of plans and
sections; means of access and
egress; transport of men and
materials; mine workings; precautions
against dangers from fire, dust, gas
and water, ventilation, lighting,
explosives and shot firing; use of
machinery, plant and equipment etc.
An Act prohibiting contract labour in
specified categories of work.
An Act to regulate the manufacture,
possession, use, transport, import
and export of explosives.
The Act deals with registration, fitness,
and other matters pertaining to motor

xx

Annexures

Acts/Rules/Regulations

Promulgation

Factories Act

1948

The Trade Union Act

1926

Industrial Disputes Act

1947

Workmans Compensation Act

1923

Payment of wages Act

1938

Coal Mines Provident Fund and

Miscellaneous Provisions Act

1948

Minimum Wages Act

1948

The Maternity Benefit Act

1961

Payment of Bonus Act

1965

The Payment of Gratuity Act

1972

The Equal Remuneration Act

1976

T E R I Report No. 2001EE42

Amendment

Brief Content
vehicle.
The Act seeks to regulate the working
of factories.
An Act providing for registration of
unions and their rights as registered
trade unions.
An Act to make provision for the
investigation and settlement of
industrial disputes.
An Act to provide compensation by an
employer to an employee in case of
injury or death.
An Act to regulate the payment of
wages to certain classes of employed
persons.
An Act to make provision for the
framing of a Provident Fund Scheme,
a family pension scheme and a bonus
scheme for coal mines employees.
The Act prescribes the minimum
wages for different categories of
persons in different States.
An Act to regulate the employment of
woman in certain establishments for
certain periods before and after
childbirth and to provide for maternity
benefit.
An Act to provide for the payment of
bonus to persons employed in certain
establishments on the basis of profits
or on the basis of production or
productivity and for matters
connected therewith.
An Act to provide for a scheme for the
payment of gratuity to employees
engaged in factories, mines, oilfields,
plantations, ports, railways, shops or
other establishments and for matters
connected there with or incidental
thereto.
The Act provides for the payment of
equal remuneration to men and
women workers as and for the
prevention of discrimination on the
ground of sex against women in the
matter of employment and for matters
connected therewith or incidental
thereto.

xxi

Annexures

Annexure 7
List of central trade union organisations
S.NO

Name & Address of Orgns.

1.

Bhartiya Mazdoor Sangh,

Shri Raman Girdhar Shah,

Tilak Gali, Paharganj,

President

New Delhi-110055

Shri Hasu Bhai Dave, Genl. Secy.

Phone: 3620654,3624212

Shri R.Venugopal

Fax No: 3517307

Working President

Indian National Trade Union

Shri G.Sanjeeva Reddy, President

Congress,

6/B, LIGH, Barkatpura,

SHRAMIK KENDRA,

Hyderabad-500027

4, Bhai Veer Singh Marg,

Phone : 040 7564706

New Delhi-110001

Shri Rajendra Prasad Singh, MLA

Phone : 3747767,3747768

General Secretary,

Fax No : 3364244

Dhori Staff Quarters,

2.

Name of the Office Bearers

Post Office Dhori,

Distt. : Bokharo 825102
Phone : 0612-283392
0612-211159
3.

Centre of Indian Trade Unions,

Shri E.Balanandan (M.P), President,

13-A, Rouse Avenue,

Shri M.K.Pandhe, Genl. Secretary.

New Delhi-1100002
Phone : 3221284
Fax No : 3221288
4.

5.

Hind Mazdoor Sabha,

Shri A.Subramanian, President

120, Babar Road,

Shri Umraomal Purohit,

New Delhi-110001

General Secretary,

Phone : 3315519

1st Poddar Estate,

Fax No : 3411037

Malad (East), Bombay-400097

All India Trade Union Congress,

Shri J. Chitranjan, President

24, Canning Lane,

Phone : 3737549

New Delhi-110001

Shri K.L. Mahendra

Phone : 3386427, 3387320

General Secretary.

Fax No : 3386427

4-22-493,Eitabar Chowk,
P.O.Jubilee,
Hyderabad (T-4417961)

United Trade Union Centre (LS)

Shri Ashutosh Banerjee,

77/2/1, Lenin Sarani,

President

Calcutta-700013

Shri Tapas Dutta,

Phone : 033-2449085,246754

General Secretary

Fax No : 033-2465114,
2467754

T E R I Report No. 2001EE42

xxii

Annexures
Delhi Address :
7085/10, Ground Floor,
Rameshwari, Nehru Nagar,
Karol Bagh, New Delhi-1100055
Phone : 5726631
7.

United Trade Union Congress,

Sh. Sushil Bhattacharya, President

249, Bipin Behari Ganguly

Sh. S.R.Sen Gupta

st

Street, 1 Floor,

General Secretary

Calcutta-700012
Delhi Address :
17, Pherozeshah Road,
New Delhi-110001
Phone : 3782109, 3782167
8.

National Front of India Trade

Shri Naren Sen,

Unions

Shri O.P.Verma, President,

Institute Building,

(Delhi Unit),

10, Govt. Place East,

BA-4E, DDA Flats, Munirka,

Calcutta-700069

New Delhi-110067

Phone : 2483708, 2480331

Phone : 6165135, 6192608

T E R I Report No. 2001EE42

xxiii

Annexures

Annexure 8
Campaign against injust mining by Social Action Groups
No.

Organisations involved

Issues

Forms of protest and demands of people

1.

Karanpura Ghati Bachao

Coal mining in the Damodar Valley

Adequate resettlement, compensation and

Andolan, INTACH, Jharkhand

widespread displacement of

employment. INTACH is focussing on

Mukti Morcha, etc.

tribals with attendant problems

preservation of the cultural and naturla

and large scale destruction of

heritage of the region.

biodiversity
2.

Jharia Bachao Samity

Fire in the underground coal mines

Resettlement of those displaced by the

underground fires.

3.

Natures Beckon and

Mining lease of a rock quarry on the

Chanderdinga hill acts as a natural dam

Appropriate Technology Mission

Chanderdinga hill on the banks of

cum embankment, protecting the

Brahmaputra in Dhubri, Assam

Bilasipara sub-division. Mining here will

cause grave environmental damage apart
from causingtremendous monetary losses
to the State exchequer.

4.

Local Groups of workers union.

NMDC (Madhya Pardesh) is giving

The workers along withtheir strong trade

Baliadala iron ore mines to the

union are fighting against it. They are ready

private sector. This will cause

to give their life.

retrenchment of workers
5.

Gandhamardan Suraksha

Orissa Mining Corporation has

The people are protesting against this

Parishad

procured the licence to explore the

exploration as it poses danger to the tribal

Gandhamardan hills mineral

identity living in the forests.

potential.
6.

Srijan Lokhit Samiti

Forcible land acquisition for the

People are protesting against improper fly

Singrauli Coal Mines and the

ash disposal, degradation of water sources

problems caused by the opertion of

from the mine run off, industrial effluents

coal mines in the region

and siltation. The protests are also against

the large scale displacement and the
attendant problems thereof.

7.

Green Society, Assam

Flagrant violation of the norms as

Environmental degradation by the mining

under the EPA, 1986 by the North

process in the region. The coal here

Eastern Coal Fields in the Tikkak

contains high sulphur content, which has

open cast mine of Margherita

seeped into the underground water and is

district in Assam.

causing diseases in human beings and

destruction of aquatic and marine life in the
region.

8.

NYSASDRI (National Youth

Sukinda Chromite mines, Orissa.

People are in continuous protest. The

Service Action and Social

Environmental pollution, especially

various studies done on health hazards

Development Research

Chromium seeping into the rivers

have brought the issue in the eye of public.

Institute)

from mines which causes skin

The demand is for closure of mines and

diseases, respiratory diseases and

many mines are already closed.

lung cancer to the people living in

T E R I Report No. 2001EE42

xxiv

Annexures
the region.
9.

Path Agragami Sangh

Bauxite mining by Hindalco, owned

Land acquisition, no proper compensation,

by the Birlas in Palamu district of

etc. The tribals (Nagacia) revolted back and

Bihar in village Oraspth and

Birla had to withdraw.

Kukurpth.
10.

KGF Protection and

Kolar Gold Fiels, part of Bharat

The retrenchment of 2500 workers by the

Development Fron

Gold Mines.

way of voluntary retirement schems.

However, the issue that was worker v/s
management has been changed to people
v/s the mining industry.

11.

Tarun Bharat Sangh, Rajasthan

Marble mining inside Sariska Wild

After a strong peoples protest and writ

Life Sancturary. Serious

petiiton in apex court during 1991, 215

environmental threats.

mines were ordered closure. Again in

1996, TBS took similar campaign in Jaipur
with same favourable result.

12.

Local environmental groups

T E R I Report No. 2001EE42

Mining of 21 MTs of bauxite from

The people and the Forest Dept. are

Radhanagri, Maharashtra bison

opposing the project and have filed writ

sanctuary.

petition against the industry.

xxv

Annexures

Annexure 9
List of Non-Governmental Organisation
Name of organization

Address & Telphone No.

Contact person

Centre for Tribal Conscientization

B-30, Kasturbawadi, Pune 411 015

Sharad D Kulkarni

Tel: (020) 6692942

National Committee for Protection

C/o. SPS, Ashadeep, Jayanagar, Saptapur, Dharwad 580

of Natural Resources (NCPNR)

007

S R Hiremath

Tel: (0836) 774472/ 7773038

E-mail: [email protected]
Visthapit Mukti Vahini

A4-85, A-Road, Telco Colony, Jamshedpur 830 004

Arvind Anjum

Tel: (0675) 282039

Navodaya Educational &

2nd Cross, Maruti Nagar, Near Kalabhairava Temple,

Environment Development Service

(Benchinamaradi), Ranebennur 581 115, Dist. Haveri

(NEEDS)

Tel: (08373) 61054

FARR

Muniguda, Dist. Raigad, Orissa

S D Baligar

Bijay Kumar Babu

Ekta Parishad

Gandhi Bhavan, Shyamala Hills, Bhopal 462 002, M.P

Gautam Bandhopadhyaya

Dasholi Grama Swarajya Sangh

Gopeshwar, Dist. Chamoli 246401, U.P

Chandi Prasad Bhatt

Jungal, Jamin, Pani Lokhadhikar

Anjali, Plot No.22, Shulabh Co-op. Hsg Society, Tadwadi,

R V Bhuskute

Andolan

Ambarnath East, Thane District 421501

Tel: (0251) 682238

Adivasi Punarvasan Andolan

C/o. Shanti Sewa Mandal at & P.O Manor, Tq. Palghar, Dist.

R V Bhuskute

Thane 401403
Astha Sansthan

Udaipur, 39, Kharol Colony, Rajasthan 313001

Bhanwar Singh Chadana

Tel: 560348
Fax: 523391
Gujarat Prakruti Sanrakshan Samiti

At P.O. Vedchchi 394641, Tq. Valod, Distt. Surat (Gujarat)

Ashok Chaudhari

Vikasana

No.350, Kuvempu Road, Tarikere 577228, Karnataka

Vergheese Cleatus

Jan Vikas Andolan (JVA)

The Timbaktu Collective, Chennakothapalli Village, Anantpur

Bablu Ganguly

515101
Tel: (08559) 47337 (Farms) 47335 (o)
Yuvak Vikas Kendra

Plot No.265, HUDCO, Jalanagar, Near Water Tank, Bijapur

Basavaraj Golay

586 101
Tel: (08352) 54870
Aranya Vikasa

Vasavanagudi, Shimoga Karanataka

Rama H Gubbi

Tel: (08182) 77103

Vrikshamitra

Tandon Wada, Gandhi Chowk, Chandrapur 442402

Mohan Hirabai Hiralal

(Maharashtra)
Tel: (07172) 58134
Fax: 59126
Janapara Vignana-Tantragnana

Nisarga, 6th Cross, Station Road, Malamaddi, Dharwad

Samathe

580007, Karnataka
Tel: (0836) 774472
Fax: 773038

T E R I Report No. 2001EE42

Shankar G Hoskeri

xxvi

Annexures
Samvada Satichinchadhari

Chiploon, Dist. Ratnagiri, Maharashtra

Rajan Indulkar

National Front for Tribal Self Rule

F-1, Chenab Apartments, Prashant Nagar, Nagpur 440 015

Vijay Lapalikar

Maharashtra Shetmajoor Ani

Samanvaya Samiti, 54, Budhwar Peth, Kakakunwa Mansion,

Subhash Lomte

Rojgar-hami Kamgar

Laxmi Road, Pune 411002

Joint Council for Tribal Action

10, Cauvery Nagar, S.V Koil Street, Crawford, Trichy 620 012

N K Ramachandran

(Tamil Nadu)
Tel: (0431) 472826
Email: [email protected]
Ekta Parishad

Gandhi Bhavan, Shyamala Hills, Bhopal 462002, M.P

P V Raj Gopal

Tel: (0755) 543800

Action Committee for Protection of

Land Resources, Behind Post Office, Ranebennur, Karnataka

Dr S L Pawar

Ashadeep, Jayanagar, Saptapur, Dharwad 580 007

Sudha Pawar

Common
Samaj Parivartan Samudaya (SPS)

Tel: (0836) 774472/ 7773038

Email: [email protected]
SAMATA

431, Aditya Nibha, Sriniketan Colony Road, No.3, Banjara

Ravi R Pragada

Hills, Hyderabad 500 034

Tel; (040) 248194
National Centre for Advocacy

Serenity Complex, Ramnagar Colony, Pashan, Pune 411

Studies

021

John Samuel

Tel: (020) 5898003/4 (o) 6694074(r)

Gram Vikas Seva Mandal

P.O. Mul 441224, Dist. Chandrapur

Moreshwar

Tel: (07174) 20338/ 20538

Wadalkondalwar

Bharatiya Adim Jati Seval Sangh

Malviya Nagar, Nagpur

R K Malviya

Vidharbha Nature Conservation

Ganeshpeth, Tidke Ashram, Nagpur

S Dilip Gode

Indian Institute of Youth Welfare

134, Shivaji Nagar, Nagpur

M Gopalwar, Director

Prakriti Sampada Sangrakshan

Orissa

Society

Parishar
FARR

Orissa

Lakshman Naijak Society for Rural

Orissa

Development
Weaker Section Integrated

Orissa

Development Agency
Jharkandi Organisation against

Jaduguda, Bihar

radiation (JOAR)
Paryavaran Surakha Samiti

Bharuch, Orissa

Vikalpa (A society for social

Gajan Mandi Road, Chandrapur, Mahrashtra

Dr. Mamidwar

AGRAGAMEE

At PO Kashipur, Rayagada -765 015, Orissa

Mr Achyut Das

Xavier Institute of Social Services

Post Box &, Purulia Road, Ranchi, Jharkhand - 835 001

Dr Christopher Lakra

National Centre for Advocacy

2, Santosh Apartments, Sheela Vihar Colony, Paud Road,

Mr John Samuel

Studies

Pune - 411 038

development)

(XISS)

T E R I Report No. 2001EE42

xxvii

Annexures

National Institute of Small Mines

Advocacy & Action Research Unit

Mr S L Chakravarty
6 A, Dhakuria Station Lane, Calcutta - 700 031
S-116, Maitri Vihar, Phase 1, Bhubaneshwar - 13

Bindrai Institute for Research Study

P.O. Box No. 3, Chaibasa, Dist. Singhbhum West, Jharkhand -

and Action (BIRSA)

833 201

Lok Bharati

Sanosra, Shihor, Bhavnagar 364230, Gujarat

Dr. Arunkumar Dave

Vikas Bharti

Bishnupur Gumla Distt. Jharkhand - 835 331

Mr A K Bhagat

NYSASDRI

Santhasara PO, Sauthapur, Via. Gordia, Dhenkanal Distt. 759

Mr S Samal

016, Orissa
Tata Steel Rural Development

E Road, Bistupur, Jamshedpur -831 001

Mr V M Mehta

Village Kasiadih, Charhi P O, Hazaribag Dt , Jharkhand - 825

Mr. A Herbert

Society
Chotanagpur Adivasi Sewa Samiti

336

T E R I Report No. 2001EE42

xxviii

Annexures

Annexure 10
List of FIPB Approvals as on 15.10.2001
(Source. http://www.nic.in/mines/ppfinvest.html)
S.No.

Date

Indian Co

Foreign Co

1.

2.8.94

C M P S & F Pty. Australia

Ltd.

2.

21.8.96

Kandula
Aluminium Co.
Ltd.
Bihar Sponge
Iron Ltd.

Australia

0.50

50

3.

20.7.96

Ashton Mining
India Pvt. Ltd.

Ashton Mining, Australia

Australia

50.00

50

4.

22.7.96

38.00

50

5.

2.11.96

Hindustan Zinc BHP Minerals Australia

Ltd.
International,
Australia.
RGC Mining Pvt. RGC Mauritius Australia
Limited.
Ltd. (Australia)

6.

2.11.96

Australia

950.00

100

7.

30.10.96

Geomysore
Services (India)
Pvt. Ltd.
BHP Minerals
India Pvt. Ltd.

Australia

2.38

100

8.

18.10.96

ACC-Rio Tinto
Ltd.

Australia

12.50

62.5

9.

20.7.96

S R L (India)

10.

28.11.98

11.

15.11.99

Australian Indian India Mining

Australia
Resources
Investment Pty.
(India) Pvt.Ltd. Ltd., Australia.
Drillcorp Western Drillcorp Western Australia
Deephole
Deephole

12.

17.4.2000

13.

29.5.2000

14.

7.12.96

15.

8.5.98

North Limited,
Australia.

Australia India
Resources, N.C.
Australia
BHP Mineral
Holdings Pvt.
Ltd., Australia
Rio Tinto
Minerals
Development
Ltd.
Strait Resources
Ltd.

Country

Equity INR Equity %

Activity
Location FC
(Rs. Cr.)
Inflow
311.50
53.43 Alumina: Manufacture AP, Vizag
of calcined alumina.

100

Australia

100

9.50

100

47.50

100

AusRutile India Austpac

Australia
Pvt. Ltd.
Resources N.L.
Astro Mining Ltd. Astro Mining N.L. Australia

18.53

74

5.00

100

Pro Am
Pro Am
Explorations (I) Exploration
Pvt. Ltd.
Corporation,
Canada
Indian
Alcan Ltd.
Aluminium

Canada

0.05

100

Canada

284.44

54.6

T E R I Report No. 2001EE42

Iron ore: Prospecting, Jharkhand,Si

mine development and nghbum
mining.
Diamonds: Exploration, Ori., MP & AP
Development and
mining.
Prospecting for base Rajastan
metals
Mineral Sands:
Exploration of minerals
sands.
Gold: Exploration and
exploitation.

TN: Tut. &

Tirun.

0.08

karnataka &
A.P.

Minerals: Exploration
and mining joint
ventures.
Minerals: Exploration of
minerals.

Minerals: Exploration,
processing and
exploitation.
Prospecting and
Exploration of Gold and
Base Metal Ores.
Drilling operations for
exploration in minerals
& associ. Sectors
Exploration of Beach Chatrapur,
Sand minerals
Orissa
Exploration of minerals,
precious metals and
base metals
Minerals: Natural
TN;A.P;MP;Ke
mineral resources and rala
oil.
Aluminum

32

1.5

9.5

0.07

xxix

Annexures
S.No.

Date

Indian Co

16.

21.12.96

17.

10.1.2000

18.

24.1.2000

BHP Khanij
Anveshna Pvt.
Ltd.

19.

17.7.2000

20.

31.8.96

21.

12.9.98

22.

14.6.97

23.

9.5.98

24.

20.3.99

25.

20.7.96

26.

12.9.98

27.

20.9.99

28.

17.4.2000

29.

3.8.96

30.

18.4.98

31.

18.7.2000

Limited
Meridian
Minerals India
Pvt. Ltd.
Meridian Peak
(India) Pvt. Ltd.

Foreign Co

Country

Meridian Peak Canada

Resources
Corporation
Meridian Peak Canada
Resources
Corporation
BHP World
Canada
Exploration Inc.

Equity INR Equity %

(Rs. Cr.)

Activity

Location FC
Inflow

19.00

100

Minerals: Exploration in Rajasthan

the mining sector.

5.89

19.00

100

Mineral Exploration in
the mining sector.

5.89

8.70

100

ADI Gold Mining Pebble Creek Canada

Pvt. Ltd.
Resources Ltd.

0.89

89

Lum Mawshun Lafarge Surma France

Minerals Pvt. Ltd. Cement
Micafine Ratan Micromineral
Germany
(Bharat) Pvt. Ltd. Micafine ,
Germany
Ferro Ore &
Marubeni
Japan
Maritime Pvt. Ltd. Corporation,
Japan.
Daibeck India Daibeck Co. Ltd., Korea
Abrasive Pvt. Ltd. Korea

55.93

74

0.10

10

Prospecting &
exploration for
minerals, mining other
than iron
Exploration & Mining UP
for Cu, Lead, Zn in Dist.
Pittoragarh, UP
Limestone: Mining and Meghalaya
export.
Production of Dry & Wet
Ground Mica Powder

23.75

50

Iron Ore: Mining of iron Goa.

ore.

5.49

100

TDT Copper Ltd. Taihan Electric Korea

Wire Co. Ltd.
(69.19%) {Tomen Corp.,
Japan
(28.88%)}
Normandy Anglo Normandy Anglo Malay.
Asian (I) Pvt. Ltd. Asia Pty. Ltd.,
Malaysia
Kama Srinivasa Kashartha SDN Malaysia
Rao, Hydserabad BHD, Makaysia
Inglewood
Inglewood
Mauritius
Minerals Pvt.
Holdings Ltd.,
Ltd.,
Mauritius
Sterlite
Twinstar
Mauritius
Industries India Holdings Ltd.
Ltd./ MALCO

17.00

98.7

Garnet: Manufacture of
Industrial Garnet
Powder.
Electrolytic Copper
Rods or Black Copper
Rods (including Coils)

0.48

100

Minerals: Mining
Exploration activities.

0.74

74

5.00

100

Manufacture of Stone
Aggregates
Exploration in the
Rajasthan
Mining Sector

Dolphin Offshore Techy

Neth.
Ltd.
Investment B.C.
Netherlands
Pasminco
Pasminco
Net'lands
Exploration Pvt. Netherlands
Ltd.
(Holdings) B.V.
Hydro Alum.
Norsk Hydro
Net'lands
Extrusions Bldg. Holland B.V.

0.04

T E R I Report No. 2001EE42

28.57

4.75

5.00

0.73

TN, Chengai
MGR

3.49

Rewari,
Haryana

15.3

12

19/80 Tel. Cables, Optical

Maharastra/
Fibre, etc./ Primary
Tamil Nadu
Metal, Properzi rods
rolled products,
extrusions, alumina etc.
75 Minerals: Survey,
TN, Chengai,
research, analysis,
MGR
assessment, etc.
100 Base metals:
Exploration and other
activities, etc.
Karnataka, 5
100 Manufacture of
Aluminium and building Bangalore

xxx

Annexures
S.No.

Date

Indian Co

32.

20.6.2001

33.

20.6.98

34.

11.7.98

35.

31.8.96

36.

25.10.97

37.

18.10.96

38.

24.10.98

39.

25.2.95

40.

6.3.99

41.

8.5.2000

42.

21.6.97

43.

12.4.2001

44.

26.2.98

45.

31.8.96

46.

27.12.95

Almetal
Recyclers Ltd.

47.

6.6.98

SWIL Ltd.

48.

18.4.98

49.

24.8.96

Foreign Co

Country

System (I) Ltd.

American
American
Net'lands
Exploration
Exploration
(India) B.V.
(India) B.V.
Utkal Alumina Hydro
Nor/Can
International Pvt. Aluminium/Alca
Ltd.
n Aluminium
Orissa Extrusions Hydro
Norway
Ltd.
Aluminium/
Monnet
Polservices
Poland
International Ltd. Foreign Trade
Enterprises
De Beers India De Beers
SA
Surveys Pvt. Ltd. Mauritius
Pvt.Ltd.
De Beers India De Beers
SA
Prospecting Pvt. Mauritius
Ltd.
Pvt.Ltd.
De Beers India De Bears
SA
Minerals Pvt. Ltd. Mauritius Pvt.
Ltd.
De Beers India De Beers
SA
Manag.Serv. P. Consolidated
Ltd
Mines Ltd.
De Beers
De Beers
SA
Adamas India Consolidated
Pvt. Ltd.
Mines Ltd.
De Beers India De Beers
SA
Exploration Pvt. Consolidated
Ltd.
Mines Ltd.
Gold Fields
Gold Fields
SA
Guernsey
Guernsey Ltd.,
South Africa
Anglovaal Mining Anglovaal Mining SA
India Pvt. Ltd. Ltd., South Africa
Meta Strips
SDIYCM, Inc.
Spain
Limited.
and 3 other US
Cos.
Fimex Metal
NRIs
SPore
Refiners Pvt. Ltd.
Mr. Chine Joo S'pore
Hai, Singapore

Boliden Contech Sweden

AB, Sweden
Kanthal India
Kanthal A.B.,
Sweden
Ltd.
Sweden.
Jey Jeth Granite Sunmin Marble Taiwan
Products Ltd.
Co. Ltd., Taiwan.

T E R I Report No. 2001EE42

Equity INR Equity %

(Rs. Cr.)
23.75

74

13.80

60

6.40

0.10

100

142.50

100

142.50

100

100

142.50

100

147.50

100

118.75

100

5.00

100

3.00

0.34

4.50
4.73
1.00

Location FC
Inflow

materials
Exploration, Mining,
mineral processing.
Alumina: Production of Ori., MP & AP
Alumina & Al. Oxides

12.27

31.67 Aluminium: Manufac of Ori.

Bars, Rods, Wire, Tubes
& Pipes
49 Technical Consultancy:
geology, etc.

142.50

24.80

Activity

Diamonds:
Exploration/Prospectin
g.
Diamonds: Prospecting
and mining.
Exploration/Prospectin
g of diamonds and
other minerals
Technical Consultancy
Services.

0.76

1.72

2.36

Diamonds:
Prospecting/
Exploration
Diamonds:
Prospecting/
Exploration
Gold: Exploration and
mining.

Exploration for precious

and base metals
31 Base Metals:Copper
cathode, zinc, etc. from
scrap.
100 Base metals: Recycling TN, Chengai,
cu, al, pb, zn etc. from MGR
scrap.
45 Base metals: Recycling TN, Ambattur
of non-ferrous metals
like Cu., Al, etc
5.31 Base Metals: Copper Gujarat,
Cathode manufacture Jhagadia
57.43 Electrical resistances, TN, Hosur
bimetal strips, etc.
41.66 Dimensional Blocks: AP,
Mining of dimensional Karimnagar
blocks, etc.

24.59

4.73

xxxi

Annexures
S.No.

Date

Indian Co

Foreign Co

Country

50.

19.7.96

Rio Tinto India

Pvt. Ltd.

U.K

51.

6.9.93

Metdist
Industries Ltd.

Rio Tinto
Minerals
Development
Ltd.
METDIST LTD.,
UK

UK

408.00

60

52.

13.8.96

52.25

51

53.

18.10.96

5.87

51

54.

8.8.96

Rio Tinto Orissa Rio-Tinto

UK
Mining Ltd.
Minerals
Development
Ltd.
UK
U.P. Hepworth Hepworth
Pvt. Ltd.
Minerals &
Chemicals Ltd.,
UK
Oxide India Pvt. VAM Ltd., UK
UK
Ltd.

55.

10.1.98

13.97

56.

25.10.99

57.

13.12.99

Cookson India
Limited.
Joy Mining
Machinery India
Ltd.
M/s BPB
Holdings India
Pvt. Ltd.

58.

59.
60.

61.

62.

63.

Cookson Group UK
Inc., UK
Joy Mining
UK
Machinery Ltd.,
U.K.
M/s BPB India UK
Ltd., U.K.

Phelps Dodge
Phelps Dodge - Exploration
11.12.2000 Metdist Mining Corporation,
India P. Ltd.
USA & Metdist
Ltd., UK
5.1.96
Indian Barytes &
Chemicals Ltd.
10.11.95
Finolex Essex
Essex Group Inc.
Industries Ltd. USA (Tech.
Collaboration)
30.6.94
GMDC / Gujarat Ambassador
Alkalies &
Group Inc. and
Chemicals Ltd. Jefferies & Co
24.1.97
Gujarat
Raytheon
Aluminium &
Engineers &
Bauxite Ltd.
Constructions
Inc.
3.8.96
Isrim Stones
Rimtech
India Ltd.
Corporation

64.

21.12.96

65.

9.8.97

UK & USA

Equity INR Equity %

Activity
Location FC
(Rs. Cr.)
Inflow
57.00
100 Technical Consultancy Delhi
46.2
and other services

0.01

0.03

57.60

47.50

Gujarat

20.21

Orissa,
Keonjhar
Dist.

14.5

Mineral Sands:
UP,
Beneficiation of silica Allahabad
sands.

13.81 Alumina: Man of high & WB, Burdwan

low alumina bed
support, catalyst career
98.17 Raw material for
alkaline batteries.
60 Manufacturing of
WB, Calcutta
0.03
Mining and Material
handling equipments.
100 For setting up of a WOS
23.52
for downstream
investment upto 74% in
Gypsum based
projects.

100

Exploration,
development, mining
Rajasthan
and processing of base
and precious minerals
Baryte: Beneficiation of AP,
low grade Baryte Ore Cuddapah
Base metals:
Goa
Continuous copper rod
manufacture
Alumina: Manuf.of
Gujrat, Kutch
calcined fused
alumina, Power, etc.
Aluminium: Manufac of Gujrat, Kutch
alumina, aluminium
compounds, coke, etc.

USA

USA

66.00

17

USA

162.80

22

USA

2.00

10

Transworld
Transworld
USA
Garnet India Pvt. Garnet Co., USA
Ltd.
Phelps Dodge Phelps Dodge USA

10.50

100

71.25

100

T E R I Report No. 2001EE42

Base Metals: Copper

smelter and refinery
project.
Development of Iron
ore project in Orissa.

Stone: Manuf.of
Kar, Belgaum
composite stone and
veneer panels
Mineral Sands:
TN, Tuticorin
Prospecting of mineral
sands.
Base Metals: Expl,

3.89

0.8

xxxii

Annexures
S.No.

Date

66.

1.2.97

67.

9.4.2001

68.

30.1.96

69.

24.4.92

70.

13.3.99

Indian Co

Foreign Co

Exploration India Exploration

Pvt. LTD
Corporation
Ashapura Volclay Volclay
Pvt. Ltd.
International,
USA
Entraco Metals NRIs
Pvt. Ltd.
Geotech Pvt. Ltd. Dr. Marshall
Silver

Country

USA

0.50

50

USA

0.20

40

Vietnam

0.03

30

164.00

25

0.10

50

Larsen & Toubro To be identified

Ltd. (Rayakal
Alum. Co. Ltd.)
Everlast
Alvan BVBA
Belgium
Engineering Ltd.,
GRAND TOTAL

T E R I Report No. 2001EE42

Equity INR Equity %

(Rs. Cr.)

3963

Activity
mining, smelting of cu,
znc & ni
Bentonite: Manuf. &
mkting of value added
Bentonite.
Manufacture of cobalt
powder
Technical Consultancy
services in geotechnology
Alumina.

Location FC
Inflow

Bhuj Distt.
Gujarat

0.39

Maharastra
Nasik

Ori, Raigad

Aluminium Extrusions Thane,Mah

and Alupan Kits
247.11

Title of the chapter

List of abbreviations

AITUC

All India Trade Union Congress

BALCO
BGML

Bharat Aluminium Company Limited

Bharat Gold Mines Limited

BMS

Bharatiya Mazdoor Sangh

CAGR
CASS
CIL

Compounded Annual Growth Rate

Chotanagpur Adivasi Sewa Simiti
Coal India Limited

CITU

Centre of Indian Trade Unions

CMPDI
CSESMP
CSO
CSRP
DGMS
EIA
EMP
EPA
FCA
FDI
FIPB
GACL
GDP
GIS
GOI
GSI
HCL
HINDALCO

Central Mine Planning and Development Institute

Coal Sector Environmental and Social Mitigation Project
Central Statistical Organisation
Coal Sector Rehabilitation Project
Director General of Mine Safety
Environmental Impact Assessment
Environmental Management Plan
Environment Protection Act
Forest Conservation Act
Foreign Direct Investment
Foreign Investment promotion Board
Gujarat Ambuja Cements Limited
Gross domestic product
Geographic information systems
Government of India
Geological Survey of India
Hindustan Copper Limited
Hindustan Aluminium Company

HMS

Hind Mazdoor Sabha

HZL
HZL
IBM
ILO
INDALCO

Hindustan Zinc Limited

Hindustan Zinc Limited
Indian Bureau of Mines
International Labour Organisation
Indian Aluminium Company

INTUC

Indian National Trade Union Congress

IPDPs
JBCCI
JOAR
LAA
MALCO

Indigenous people development plan

Joint Bipartite Committee for the Coal Industry
Jharkhandi Organisation Against Radiation
Land Acquisition Act
Madras Aluminium Company

T E R I Report No. 2001EE42

Abbreviations

MCR
MECL
MGMI
ML
MM(R&D) Act
MoEF
MoM
MRTP Act
NALCO
NFITU
NGO
NLC
NLO
NMDC
PAP
PL
PPCL
PSUs
PWD
R&R
RAPs
SAIL
SC
SHGs
ST
UN
UTUC
WB
WFTU

Mineral Concession Rules

Mineral Exploration Corporation Limited
Mining Geological and Metallurgical Institute of India
Mining lease
Mines and Minerals (Regulation and Development) Act
Ministry of Environment and Forests
Ministry of Mines
Monopolies and Restrictive Trade Practices Act
National aluminium Company Limited
National Federation of Indian Trade Unions
Non-Governmental Organisation
Neyveli Lignite Corporation Limited
National organisation of labour
National Mineral Development Corporation
Project affected people
Prospecting lease
Pyrites, Phosphates and Chemicals Limited
Public Sector Undertaking
Public Works Department
Rehabilitation and Resettlement
Rehabilitation action plan
Steel Authority of India Limited
Scheduled Caste
Self help groups
Scheduled Tribes
United Nations
United Trade Union Congress
World Bank
World Federation of Trade Unions

T E R I Report No. 2001EE42

Bibliography
CSO. 1999
National Accounts Statistics 1999
New Delhi: Central Statistical Organisation. 228 pp.
DSPS. 2000
Campaign for people's control over natural resources. The land acquisition,
rehabilitation and resettlement bill, 2000 (draft by voluntary organisation)
Dharwad, Samaj Parivartana Samudaya. 103 pp.
FIMI. 1993
Seminar Proceedings. 620 pp.
[International Seminar on Mineral Sector in India: Need and Scope of Development under new
Economic Policy of globalisation and Technology Upgradation, organised by Federation of Indian
Mineral Industries, Hyderabad, 11-13 February 1993]
FIMI. 2000
FIMI mineral industries yearbook
New Delhi: Federation of Indian mineral industries. 251 pp.
FIMI. 2001
Directory of members
New Delhi: Federation of Indian Mineral Industries. 124 pp.
FIMI. 2001
Forest (conservation) act 1980: rules and guidelines as amended up to 14/09/2001
(consolidated guidelines for diversion of forest land under the forest (conservation)
act, 1980)
New Delhi: Federation of Indian mineral industries. 162 pp.
FIMI. 2001
Seminar on environment and forestry in mining areas; 29-30 October, 2001,
Khajuraho, MP, India
New Delhi: Federation of Indian mineral industries. 124 pp.
Ghose A K. 1996
Small/Medium Scale Mining A Global Perspective (edited by A K Ghose)
New Delhi & Calcutta, India: National Institute of Small Mines and Oxford & IBH Publishing Co.
Pvt. Ltd. 296 pp.
ILO. 1999
Social and labour Issues in Small-Scale Mines
Geneva
Geneva: International Labour Organisation.
[Report for discussion at the Tripartite meeting on Social and labour Issues in Small-Scale Mines,
Geneva, 17-21 May 1999]
(www.ilo.org/public/english/dialogue/sector/techmeet/tmssm99/tmssmr.htm)
Joshi Y G. 1998
Mega Event- edited by Y G Joshi. 323 pp.
[Proceedings of Seminar on Indian Mineral Industry A Perspective, Nagpur, Organised by
Ministry of Steel & Mines, Department of Mines]

T E R I Report No. 2001EE42

Bibliography
McPhail K and Aidan Davy. 1998
Integrating Social Concerns into Private Sector Decision making A Review of
Corporate Practices in the Mining, Oil and Gas Sectors
Washington DC, USA: The International Bank for Reconstruction and Development / The World
Bank. 76 pp.
[World Bank Discussion Paper No. 384]
MEAI. 2001
Souvenir of national seminar on mining, environment and society - 13-14 October,
2001
Udaipur: Mining Engineers' Association of India. 222 pp.
MoC. 2001
Annual Report 2000/01
New Delhi: Ministry of Coal. 173 pp.
MoL. 2001
Annual Report 2000/01
New Delhi: Ministry of Labour. 338 pp.
MoM. 1994
Mica in Andhra Pradesh (Bulletin No 28)
Nagpur: Ministry of Mines, Indian Bureau of Mines. 22 pp.
MoM. 1995
Lead & zinc mining in Rajasthan (Bulletin No 29)
Nagpur: Ministry of Mines, Indian Bureau of Mines. 136 pp.
MoM. 1995
Monograph on barytes (Mineral facts and problems No 15)
Nagpur: Ministry of Mines, Indian Bureau of Mines. 119 pp.
MoM. 1996
Manganese ore: monograph (Mineral facts and problems No-16)
New Delhi: Ministry of Mines, Indian Bureau of Mines. 142 pp.
MoM. 1997
Monographs on iron ore
Nagpur: Ministry of Mines, Indian Bureau of Mines. 227 pp.
MoM. 2000
Ministry of Mines & Minerals. India's trade & export prospects in minerals, metals
& alloys
Nagpur: Ministry of Mines, Indian Bureau of Mines. 93 pp.
MoM. 2000
Monograph on copper ore (Mineral facts & problems no-18)
Nagpur: Ministry of Mines, Indian Bureau of Mines. 303 pp.
MoM. 2000
Reclamation/Restoration: techniques & stratergy for mined out areas
Nagpur: Ministry of Mines, Indian Bureau of Mines. 122 pp.

T E R I Report No. 2001EE42

Bibliography
MoM. 2001
Annual Report 2000/01
New Delhi: Ministry of Mines. 85 pp.
(www.nic.in/mines)
MoM. 2001
Mineral concession rules - 1960 (as amended up to 22.01.2001)
Nagpur: Ministry of Mines, Indian Bureau of Mines. 138 pp.
MoM. 2001
Mineral conservation and development rules -1998 (as amended up to 25/09/2000)
Nagpur: Ministry of Mines, Controller- General. 107 pp.
MoM. 2001
Mines and Minerals development and regulation Act - 1957 (No 67 of 1957) as
amended up to 12/09/2000
Nagpur: Ministry of Mines, Indian Bureau of Mines. 40 pp.
MoS & M. 1999
Granite conservation and development rules - 1999
Nagpur: Ministry of Steel & Mines, Indian Bureau of Mines. 38 pp.
NCAS. 1999
Land acquisition, rehabilitation policy: issues and perspective
Pune: National Centre for Advocacy studies.
[Info Pack Issue no 3, January-April 1999]
NCAS. 2000
Unjust Mining Issues and Campaigns (Issue 4)
Pune: National Centre for Advocacy Studies. 126 pp.
NCAS. 2000
Unjust Mining Issues and Campaigns
Pune, India: National Centre for Advocacy Studies. 125 pp.
[Info Pack, Issue No. 4, March 2000]
WWF India. 1999
Environmental NGOs in India A Directory
New Delhi: The World Wide Fund for Nature India. 582 pp.

T E R I Report No. 2001EE42