Table of Contents
Introduction: Mining Sector in India
The mining sector in India plays a crucial role in the country’s economy, providing essential raw materials for various industries like construction, infrastructure, and manufacturing. Here’s a simplified introduction to the mining sector in India:
- Strategic Importance: India has a natural advantage in the production of minerals like steel and alumina, making it a key player in the global market. Its strategic location helps in exporting to fast-growing Asian markets.
- Rich Mineral Resources: India is rich in both metallic minerals (like bauxite, chromite, and iron ore) and non-metallic minerals (like coal and lignite), making it largely self-sufficient in these resources.
- Contribution to Economy: The mining industry significantly contributes to India’s GDP, boosts foreign exchange earnings and supports vital industries like construction, automotive, and power by providing them with affordable raw materials.
- Growth Drivers: Infrastructure development, increasing automotive production, and rising demand in power and cement industries are major drivers of growth in the mining sector.
- Future Prospects: The demand for iron and steel is expected to grow further, fueled by the booming residential and commercial construction sectors.
Mineral Production and Growth in India (February 2024)
| Mineral | Production (February 2024) | Growth (February 2024 vs February 2023) |
|---|---|---|
| Coal | 966 lakh tonnes | 12% |
| Lignite | 42 lakh tonnes | 2.8% |
| Natural Gas (Utilized) | 2886 million cu.m. | 11% |
| Petroleum (Crude) | 23 lakh tonnes | 8% |
| Bauxite | 2414 thousand tonnes | 21% |
| Chromite | 400 thousand tonnes | 21% |
| Copper Concentrate | 11 thousand tonnes | 28.7% |
| Gold | 255 kg | 86% |
| Iron Ore | 244 lakh tonnes | -0.7% (Negative Growth) |
| Lead Concentrate | 27 thousand tonnes | -14% (Negative Growth) |
| Manganese Ore | 295 thousand tonnes | 6% |
| Zinc Concentrate | 149 thousand tonnes | 2.8% |
| Limestone | 387 lakh tonnes | 13% |
| Phosphorite | 218 thousand tonnes | 19% |
| Magnesite | 10 thousand tonnes | 3% |
Source: IBEF
Key Indicators of India’s Mining Sector (FY23-FY25)
| Key Indicators | Data |
|---|---|
| Index of Mineral Production (February 2024) | 139.6 (8% higher than February 2023) |
| Overall Coal Production (FY23) | 893.08 MT (22.6% growth from FY19) |
| Overall Coal Production (FY24) | 997.25 MT (12% growth from last year) |
| Crude Steel Production (April FY25) | 1.838 MT |
| Finished Steel Production (April FY25) | 11.215 MT |
| Crude Steel Production (FY23) | 125.32 MT |
| Finished Steel Production (FY23) | 121.29 MT |
| Iron Ore Production (FY23) | 257.85 MT |
| Iron Ore Production (FY22) | 253.97 MT |
| Iron Ore Production (FY21) | 205.04 MT |
| Iron Ore Production (April-December 2023) | 202.64 MT |
| Iron Ore Exports (2022-23) | US$ 1.75 billion |
| Iron Ore Exports (2021-22) | US$ 3.18 billion |
| Aluminium Production (FY23) | 4.07 MT |
| Index of Mineral Production (December 2023) | 139.4 (5.1% higher than December 2022) |
| Cumulative Growth (April-December 2023-24) | 8.5% |
| Mineral Production Value (FY23) | Rs. 1,18,246 crore (US$ 14.37 billion) |
| Mineral Production Value (FY22) | Rs. 1,32,747 crore (US$ 16.04 billion) |
| Number of Steel Plants in India (FY22) | 901 |
| Crude Steel Production (April-January FY24) | 118.372 MT |
| Finished Steel Production (April-January FY24) | 113.848 MT |
| Estimated Steel Production Growth (FY24) | 4-7% (123-127 MT) |
| SAIL’s Hot Metal Production (April-January FY24) | 16.97 MT |
| SAIL’s Crude Steel Production (April-January FY24) | 15.94 MT |
| SAIL’s Saleable Steel Production (April-January FY24) | 15.30 MT |
| Aluminium Production (April-January FY24) | 3.47 MT |
| World Primary Aluminium Production (April-January FY24) | 59.562 MT |
| India’s Share in World Aluminium Production | 5.8% |
Recent Investments and Developments
Iron Ore
| Date | Investment/Development | Details |
|---|---|---|
| Q3 FY24 | Mining GDP Growth | India’s mining GDP increased from Rs. 76,877 crore (US$ 9.25 billion) in Q3 FY23 to Rs. 82,680 crore (US$ 9.95 billion) in Q3 FY24. |
| Nov 2021 | JSW Steel Crude Production | JSW Steel produced 7.35 MT of crude steel, an increase of 8% YoY, driven by increased capacity utilization and new product launches. |
| FY22 | Iron and Steel Export Growth | India’s iron and steel exports were valued at US$ 17.62 billion, with a CAGR of 17.15% during FY16-22. |
| Sept 2022 | SAIL Specialty Steel for INS Vikrant | SAIL supplied about 30,000 tonnes of specialty steel for India’s first indigenously built Aircraft Carrier INS Vikrant, commissioned in September 2022. |
Aluminium
| Date | Investment/Development | Details |
|---|---|---|
| Feb 2023 | Hindalco Aluminium-Air Batteries | Vedanta’s aluminum division will focus on backward integration, putting two Odisha mines into production. |
| Feb 2023 | Tata Steel-Punjab Govt MoU | Tata Steel signed an MoU with the Government of Punjab to set up a 0.75 MnTPA steel plant with a scrap-based electric arc furnace. |
| 2021 | Vedanta Ltd. Lanjigarh Alumina Expansion | Vedanta Ltd. received approval for expanding its Lanjigarh Alumina refinery from 1 million tonnes to 6 million tonnes, an investment of Rs. 6,483 crore (US$ 993 million). |
| FY24 | Vedanta’s Aluminium Division Focus | Vedanta’s aluminium division will focus on backward integration, putting two Odisha mines into production. |
Coal
| Date | Investment/Development | Details |
|---|---|---|
| April-Sept 2023 | Coal Production Increase | Karnataka and Rajasthan initiated the first auction of Exploration Licences for critical and deep-seated minerals under the amended Mines and Minerals Act, of 1957. |
| Feb 2023 | NMDC-CSIR-IMMT Agreement | NMDC signed an agreement with CSIR-IMMT, Bhubaneswar for feasibility studies on “Preparation of Fused Magnesia from Kimberlite Tailings.” |
| Oct 2022 | Coal India-RVUNL Solar Power Project | Coal India Limited (CIL) signed an MoU with Rajasthan Rajya Vidyut Utpadan Nigam Limited (RVUNL) for setting up a 1,190 MW solar power project. |
| Jan 2024 | India’s Installed Electricity Generation Capacity | India’s total installed electricity generation capacity reached 429.96 GW. |
| FY24 | Coal Production Increase | Coal production from captive mines increased by 18.67% y-o-y and contributed 14.96% to the total coal production in FY24. |
Other Metals
| Date | Investment/Development | Details |
|---|---|---|
| Feb 2024 | India-Cote d’Ivoire MoU | India and the Republic of Cote d’Ivoire signed an MoU for collaboration in Geology and Mineral Resources. |
| April 2000-March 2024 | The Union Cabinet approved amendments to the Mines and Minerals (Development and Regulation) Act, of 1957, allowing the mining of lithium and other minerals. | FDI inflows reached US$ 17.46 billion in the metallurgical industry, US$ 3.50 billion in mining, US$ 1.27 billion in diamond & gold ornaments, and US$ 27.73 million in coal production. |
| July 2023 | Mines and Minerals Act Amendment | The Union Cabinet approved amendments to the Mines and Minerals (Development and Regulation) Act, 1957, allowing the mining of lithium and other minerals. |
| March 2022 | KABIL-Australia Collaboration | KABIL and the Critical Mineral Office (CMO), Department of Industry, Science and Resources, Govt. of Australia, signed an MoU for joint investment in Li & Co mineral assets of Australia. |
| Nov 2022 | IIT Bombay-JSW Technology Hub | IIT Bombay and JSW Group signed an agreement to establish India’s first state-of-the-art JSW Technology Hub for steel manufacturing. |
| Jan 2023 | Vedanta-HZL Asset Sale | Vedanta approved the sale of its international zinc assets in South Africa and Namibia to Hindustan Zinc (HZL) for US$ 2.98 billion. |