385 mines auctioned since 2015, only 50 operational; challenges persist

Of the 385 mines auctioned since 2015, only 50 have begun operations, highlighting the challenges in India’s mining sector.

This comes despite the government bringing in major reforms in the Mines and Minerals (Development and Regulation) Act, 1957 (MMDR Act) in 2015 to introduce key changes in the mineral sector, mandating the method of auction for granting concessions to ensure transparency in the allocation of mineral resources.

In response to a question in the Parliament on Monday, the minister of mines and coal, G Kishan Reddy, said: “As a result of the reforms implemented by the central government, a total of 385 mineral blocks have been auctioned in the country since the introduction of the auction regime in 2015. Of these, 50 mines are already in production.”

Reddy detailed the government's ongoing efforts to increase the share of domestic mining in the total mineral consumption and achieve ‘Aatmanirbhar Bharat’ (self-reliant India) in the mining sector.

The International Energy Agency’s (IEA’s) ‘The Role of Critical Minerals in Clean Energy Transition’ report released in 2021, indicates that major global mining projects, which became operational between 2010 and 2019, took an average of 16.5 years from discovery to production.

The gross value added of the mining and quarrying sector accounts for 2 per cent of the country's GDP. The contribution of the mining and quarrying sector in value terms has increased from Rs 2,90,411 crore in 2014-15 to Rs 3,18,302 crore in 2022-23.

The government said the amendments made in the MMDR Act have led to speedy auction and production from mines.

The amendments have been instrumental in augmenting the production of key minerals, for example, the production of iron-ore has increased from 129 million tonnes in 2014-15 to 258 million tonnes in 2022-23 and the production of limestone has increased from 295 million tonnes in 2014-15 to 406 million tonnes in 2022-23, the minister said.

The MMDR Act, 1957 was amended with effect from March 28, 2021 with the objective of inter-alia increasing mineral production and time bound operationalisation of mines, increasing employment and investment in the mining sector; increasing the pace of exploration and auction of mineral resources.

Some of the key amendments include removing end-use restrictions for auction of mines, allowing captive mines to sell up to 50 per cent of minerals produced during the year after meeting the requirement of linked plant and removing restrictions on transfer of mineral concessions.

The MMDR Act, 1957 was further amended through the MMDR Amendment Act, 2023 with effect from August 17, 2023 with the objective of increasing exploration and production of critical and deep-seated minerals, which are essential for the advancement of several sectors, including high-tech electronics, telecommunications, transport and defence.