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Source: The post on India’s mining sector has been created on the article “Why India should invest in mining” published in “Indian Express” on 20th November 2023.
UPSC Syllabus Topic: GS Paper 1 Economic Geography – Distribution of key natural resources across the world (including South Asia and the Indian subcontinent).
GS Paper 3 Industrial policy.
News: The article discusses Afghanistan’s large lithium reserves and India’s potential in mining these minerals. It highlights how mining can create jobs, especially for underprivileged communities in India, and suggests a balanced approach between economic development and environmental protection.
What is the current mining sector situation in India?
Underexplored Territory: Only 10% of India’s landmass has been explored for minerals, and just 2% is mined.
Discovery of Lithium in India: There’s been a recent discovery of lithium in Jammu and Kashmir.
What are the benefits of investing in mining in India?
Job Creation: Mining generates more employment compared to other sectors. According to the 12th Five Year Plan, mining creates 13 times more jobs than agriculture and six times more than manufacturing per percentage point of economic growth.
Support for Electric Vehicles: Mining critical minerals like lithium aids the burgeoning electric vehicle industry, crucial for the transition from oil to electric mobility.
Economic Diversification: Investing in mining diversifies India’s economy, reducing reliance on traditional sectors.
Strategic Global Positioning: By entering the global mining race, India can position itself as a key player in the critical minerals market.
Deep-Sea Mining Prospects: India’s extensive coastline offers opportunities in the emerging field of deep-sea mining.
What are the issues with mining sector in India?
High Import Dependency: India heavily relies on imports for many critical minerals, such as lithium, cobalt, and rare earth elements. For example, in 2021-2022, India’s lithium imports were worth $22.15 million.
Government-Led Exploration: The majority of exploration projects are carried out by government agencies like the Geological Survey of India and PSUs, with minimal private sector involvement, leading to inefficiencies.
Regulatory Challenges: The Mines and Minerals (Development and Regulation) Act 1957, despite several amendments, has not fully liberalized the sector for private investment. The Mines and Minerals (Development and Regulation) Amendment Bill, 2023, seeks to address this by introducing new types of licenses to encourage private exploration, but concerns remain about its efficacy.
For more information on Mines and Minerals (Development and Regulation) Amendment Bill, 2023, read here
Exploration Risks: Exploration is a high-risk venture, requiring specialized, time-intensive operations. For instance, aerial surveys and geological mapping are costly and often yield less than 1% commercially viable mines.
Impact of Global Events: Global events, such as the Russian invasion of Ukraine, significantly affect India’s mineral supply chains, demonstrating vulnerability to external shocks.
Environmental Concerns: Mining activities can be harmful to the environment, necessitating a balance between ecological protection and mining.
Government Initiatives for the mining sector in India
The Mines and Minerals (Development and Regulation) Amendment Bill, 2023: an important step to promote private sector involvement in mineral exploration and mining. This move can indeed help reduce import dependencies and strengthen supply chain resilience, particularly for critical minerals that are essential for various industries, including technology and clean energy.
Part of MSP: India joined Minerals Security Partnership (MSP) as its 14th member. It is a US-led alliance launched in June 2022. The elite critical minerals club is also known as the ‘Critical Minerals Alliance’.
Source: TERI
What should be done?
Increase Exploration: Expand exploration beyond the current 10% of India’s landmass to uncover more mineral resources.
Strengthen Mining Regulations: There is a need for robust environmental, labor, and land laws to regulate mining and prevent exploitation.
Balance Environmental Concerns: Strive for a middle ground between mining development and ecological conservation.
Reimagine Economic Policies: Follow Harvard’s Kennedy School’s ‘Reimagining the economy’ initiative focusing on job-centric economic development over GDP growth.
For more information read here
Question for practice:
Discuss the potential benefits, challenges, and proposed solutions, of India’s mining sector.
