Despite government's efforts, mining sector still struggling to survive

Despite government's efforts, mining sector still struggling to survive

Despite government's efforts, mining sector still struggling to survive

The NDA government has tried hard to revive the crises-hit multi-billion dollar mining industry by taking several policy initiatives in 2015, but the sector still struggling to recover owing to various reasons.

The government in 2015 has taken several steps to revitalize the industry included passage of the Mines and Minerals (Development & Regulation) Act, initiating the process for starting auction of mines bearing minerals such as iron ore, bauxite and limestone, and notifying National Mineral Exploration Trust (NMET) to encourage mineral exploration.

Besides, the Ministry of Mines also brought several rules and guidelines which can help in improving the ease of doing business for miners.

However, 2015 will be remembered as a “depressed and distressed” year for the industry, as the earning going down due to excess production and subdued demand. Even the global demand also slumped including in China, biggest consumer of metal in the world. This has led to India getting flooded with cheap imports of steel, aluminium and other finished products – a development that has adversely impacted the domestic mining industry.

Despite the government’s plans to fast-track auctions through transparent ways and curb illegal mining with satellite-based surveillance, the sector is likely to face tough time in 2016 also due to weak global markets. Experts believe that unless the global market recovers, the prices of mineral are unlikely to go up in India also.

Mines Secretary Balvinder Kumar admits that “the mining industry is passing through a distressed and depressed phase. Supply is outstripping the demand. 2016 will be a tough year for the industry as indicators on the global level are also not very encouraging,” he says. Adding that 2015 has been a challenging year for the industry and the market sentiment was also low, both in India and globally.

The mining sector suffered hard due to closing of mines in ore rich states like Karnataka, Goa and Odisha due to illegal mining. However, highlight of the sector this year is the Centre's steps to bringing transparency in allotment of mines through auctioning.  

Some of the states like Karnataka, Odisha, Gujarat, Madhya Pradesh and Rajasthan have started the process for auctioning of ore-bearing mines. Though the processes are expected to complete by end of this fiscal, one has to wait and see how the industry will respond owing to the slump in global market.

The Mines Ministry expects that the first phase of auction comprising 70 mines will be over by March 2016. Once the auction is complete, activities in ore-rich states will resume they said adding that large number of jobs will be created and lot of economic activities will also take place.

The government hopes for aggressive bidding by private players as this time winner will get lease period for mining for 50 years and totally transparent method adopted.

Mining industry experts say that as mining is a long-term activity and takes time to fructify, expecting revival of the sector over night is totally misplaced optimism. The government is hoping that steps it has taken including new acts will certainly yield positive results for bringing sector into full thrust in coming days.
DH News Service