High energy use, low output taking a toll on mineral units: study

Country is endowed with abundant and rich reserves of a number of ferrous and non-ferrous minerals, produces close to 89 minerals

Heavy dependence on imported technology, high power consumption and low labour productivity are taking toll of Indian mineral producers, a study has said.

"In terms of techno economic efficiency of operations, most of the units manufacturing minerals lag far behind their global competitors," according to a report by Ernst & Young.

It said, "The industry (mineral) continues to suffer due to low labour productivity, high energy consumption levels, heavy dependence on imported technology, low priority on research and development initiatives and lack of diversification."

India, endowed with abundant and rich reserves of a number of ferrous and non-ferrous minerals, produces close to 89 minerals, which includes 4 fuel, 10 metallic, 48 non metallic, 3 atomic and 24 minor (including building and other materials) minerals.

The country is the largest producer of sponge iron and the second-largest producer of barytes and stealite, the report said adding that India also ranks third in the production of coal and lignite, chromite and zinc, fourth in iron ore and steel production, fifth in manganese ore, sixth in bauxite and aluminium, and tenth in copper.

However, the index for mineral production for FY 2012-13 had reported a fall of 5.09 against the previous fiscal. It was estimated at 121.91 in the period, down from 128.45 for FY 2011-12.

The report said: "...Demand for minerals is expected to grow very fast as a result of increasing consumption, infrastructure development and economic growth."

However, it added that the sector is already under stress from slowed development, lack of linkages between the entire supply chain and infrastructure, and increased pressure from global competition.

"Another challenge is the dominance of public sector players, which command majority of the total mineral production," it added.

It said the Indian mining industry is characterised by a large number of small operational mines.

In 2012-13, 3,108 mines reported mineral production {excluding minor minerals, petroleum (crude), natural gas and atomic minerals} as against 3,236 in the previous year.