India’s mining sector is undergoing a historic transformation. The recent auction of the country’s first-ever potash block highlights efforts to reduce fertilizer import dependency and strengthen food security.

Importance of India’s Mining Sector

• Economic Growth: The mining sector contributes significantly to India’s GDP by generating revenue and supplying raw materials for key industries such as steel, cement, and energy.
• Employment Generation: It provides direct employment in mining operations and indirect jobs in related sectors like transportation, manufacturing, and infrastructure development.
• Resource Security: The sector plays a crucial role in reducing India’s dependence on imports for critical minerals, including coal, lithium, and rare earth elements.
• Infrastructure Development: Mining supplies essential raw materials for constructing roads, buildings, and urban infrastructure, supporting the nation’s growth.
• Export Earnings: Minerals such as iron ore and bauxite contribute to foreign exchange earnings, strengthening the economy.
• Industrial Backbone: The sector is vital for manufacturing, construction, and emerging industries like renewable energy (solar panels, electric vehicles, and battery storage).

Reforms In Mining Sector Since 2014

• Pre 2014: Opaque Allocation, Corruption, Poor Private Participation.
• Post 2015:  Transparent Auction based allocation system was introduced, District Mineral Foundation (DMF) introduced, exploration reforms, and focus on critical minerals.
• MMDR Amendments: 
  • 2015: Auctions were made mandatory.
  • 2021: Captive/Non Captive distinction removed.
  • 2023: Critical Minerals Focus Introduced.
• Outcome Of the Reforms: 
  • Over 500 mineral blocks have been auctioned to date and 119 have been auctioned just in the last year alone. 
  • ₹4 lakh crore earned by states through auctions and royalties.

Private Sector: From Villain to Partner

• Pre-2014: Private Sector was viewed as exploitative due to illegal mining scams (e.g., Bellary iron ore scandal).
  • Trust deficit from opaque allocations and environmental violations.
• Measures Taken Post-Reforms Shift: Auction transparency reduced crony capitalism (100+ coal blocks auctioned fairly).
  • Commercial mining allowed (no end-use restrictions), boosting private investment.
  • DMF funds tied CSR to local welfare, improving community relations.
  • Tech adoption (AI, drones) enhanced compliance and sustainability.
  • 50 years lease period for stability,
  • Easy renewal and clearance transfers,
  • National Mineral Exploration Trust (NMET) Fund: 2% royalty on mineral R&D.
  • National Geoscience Data Repository (NGDR): 12000+ Public geology reports available

Critical Minerals: Fuel For The Future

• India is securing lithium, cobalt, rare earths and other critical minerals to power EVs, renewables, and tech industries.
• National Critical Minerals Mission (NCMM): 
  • Objective: Ensure secure & sustainable supply of 30 critical minerals (lithium, cobalt, rare earths, etc.) for India’s clean energy and tech sectors.
  • Supports Net Zero 207, Viksit Bharat 2047 vision.
• KABIL (Khanij Bidesh India Ltd):
  • Joint venture by National Aluminium Company Limited (NALCO), Hindustan Copper Limited (HCL), and Mineral Exploration & Consultancy Limited (MECL) to ensure mineral security.
  • Focus: Global acquisitions (e.g., lithium blocks in Argentina) and domestic exploration.
  • Goal: Reduce import reliance and strengthen clean energy supply chains.
• Offshore Mining for Deep Sea Exploration: It involves extracting minerals from the seabed beyond the coast, targeting valuable resources like polymetallic nodules, cobalt-rich crusts, and hydrothermal sulfides. 
• Reforms: Auction of critical mineral blocks  and 100% FDI to boost mining.

Cooperative Federalism: Centre-State Synergy in Mining Reforms

• Auction Framework: Centre mandates transparent auctions for major minerals (MMDR Act), while states implement & grant leases.
  • States control Mining but the Centre provides hand holding.
• Revenue Sharing: States earned ₹4 lakh crore. District Mineral Foundation (DMF) funds ensure local welfare (state-managed).
  • DMF is a non-profit trust established in mineral-rich districts under the Mines and Minerals (Development and Regulation) Act, 1957. 
  • Its objective is to work for the welfare of people and areas affected by mining-related operations, using funds collected as a percentage of royalties from mining leaseholders.
• Critical Minerals: Centre identifies strategic minerals (e.g., lithium), states facilitate exploration.
• Single Window: PARIVESH portal (Centre) integrates state clearances for faster approvals.
• Dispute Resolution: Inter-Ministerial Group mediates state-Centre conflicts (e.g., Goa mining ban).
• The States Mining Index: It ranks Indian states based on their performance in the mining sector, evaluating parameters such as exploration activity, ease of doing mining business, revenue generation, sustainability, and implementation of reforms.
  • It aims to promote healthy competition and improve overall mining governance.

Future Roadmap Mining For Smart India

• Expedited Approvals:
  • Digital Clearance Portal: Unified platform for faster environment/forest approvals (90-day target).
  • Deemed Approval: Automatic clearance if authorities don’t respond within stipulated timelines.
• Govt-Private R&D Collaboration:
  • Mining Innovation Fund: Joint ventures for tech like AI exploration, hydrogen-powered mining.
    • Funding for startups and Centre of Excellence.
  • Test-Bed Sites: Designate mines for piloting drone surveys, automated haulage systems.
• Sustainability Measures:
  • Green Mining Certification: Mandatory for all major mines (water recycling, >30% renewable energy use).
  • Community Skilling: Direct 5% of DMF funds to train locals in ESG monitoring roles.
• Carbon Footprint Reduction: Shift to renewable energy, enforce mandatory emission caps and green mining certifications to halve sectoral emissions by 2030. 

Conclusion

Ancient India was known for mineral wealth and was known as ‘Sone ki Chidiya’. Arthashastra detailed mining administration and revenue. Modern Mining must be ethical, sustainable and tech driven- key pillars of a Viksit Bharat by 2047.

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