‘Mineral out­put must go up 2.2 times to grab 3.6% of GDP’


Resource Digest - - CONTENT -

Mineral pro­duc­tion must go up 2.2 times from the cur­rent level in or­der to en­hance the min­ing sec­tor’s con­tri­bu­tion to the coun­try’s GDP by 1 per­cent­age point to 3.6% by 2019- 20, the mines min­istry has es­ti­mated.

“This means the pro­duc­tion in the min­ing seg­ment should grow by 21- 22% on year- on- year ba­sis,” a se­nior mines min­istry of­fi­cial said, adding that for any strat­egy to en­hance the con­tri­bu­tion of the min­ing sec­tor fuel min­er­als like coal hold the key.

Of the Rs 2.7 lakh crore es­ti­mated value of mineral pro­duc­tion ( ex­clud­ing atomic min­er­als) last fis­cal, fuel min­er­als’ con­tri­bu­tion was 64%. Mi­nor min­er­als had 18% share and the re­main­ing 14% was con­trib­uted by ma­jor min­er­als such as iron ore, baux­ite, chromite, man­ganese ore, lead and zinc. The min­istry feels that a two- pronged ap­proach, lay­ing thrust on both sup­ply and de­mand side, was re­quired to achieve the tar­get.

In or­der to give sup­ply- side push, it in­tends to bridge the gap be­tween sanc­tioned ca­pac­ity of min­ing plan and the cur­rent pro­duc­tion level as it feels that even with full util­i­sa­tion of the min­ing plan ca­pac­ity, an­tic­i­pated pro­duc­tion would be sig­nif­i­cantly short in re­spect of lime­stone, chromite and baux­ite.

“There­fore, to mit­i­gate the sup­ply side con­straint, ini­tia­tives would be re­quired for iden­ti­fi­ca­tion and ex­e­cu­tion of blocks ob­tained through auc­tions, ex­pe­dit­ing clear­ances, re­duc­ing the ges­ta­tion pe­riod, use of tech­nol­ogy to en­hance pro­duc­tiv­ity and op­ti­mise pro­duc­tion from op­er­at­ing mines,” said a source.

Ac­knowl­edg­ing that the de­mand elas­tic­ity of min­er­als is de­pen­dent on growth of in­fras­truc­ture and in­dus­trial sec­tor, the source said ex­cess do­mes­tic pro­duc­tion will meet the ex­port de­mand pro­vided it is com­pet­i­tive enough to make in­roads in the in­ter­na­tional com­mod­ity mar­ket. The mines min­istry is also for ra­tio­nal­i­sa­tion of duty struc­ture which could help at the mar­gin as fos­ter­ing ef­fi­ciency is the key.

The plan also in­cludes en­hanc­ing pro­duc­tion by op­er­a­tional­is­ing all the 3,844 min­ing leases of ma­jor min­er­als from only 1,800 now and ex­pe­dit­ing more than 100 min­ing lease pend­ing case for re­newal in dif­fer­ent states. There was also a need for ex­pe­dit­ing en­vi­ron­ment and for­est clear­ances for pend­ing cases.

Know­ing that iron ore could pro­vide a huge push to achieve the tar­get, the mines min­istry in­tends to lay thrust both on in­creas­ing do­mes­tic con­sump­tion and ex­ports of the steel- mak­ing raw ma­te­rial. There are plans for ra­tio­nal­iz­ing ex­port duty on iron ore and cur­rent rate of rail freights. It would also make ef­fort to en­hance de­mand for value- added prod­ucts of iron ore.

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