“Slow growth in Mining Sector retarding industrial growth in India,” Anshuman Das, CMD, Nalco

“The significance of mining sector is determined not by the amount of mineral resources it generates in a country but by the amount of catalytic input it gives towards driving the economy of the country,” said Anshuman Das, chairman-cum-managing director of Nalco during the 18Th International Conference on Non Ferrous Minerals & Metals – 2014 in Nagpur.

Mr. Anshuman Das highlighted the significant contribution that the mining sector can have towards the overall industrial growth of a country and expressed his concern over the diminishing growth of the mining industry in India.

He told that the total contribution of mining sector towards the GDP of India was about 3.4 % in 1992/93 and it has come down to about 2% at present. Even the standalone growth of the mining sector has also fallen significantly during the last two years. This has retarded the industrial growth of the country to a considerable extent.

He showed concern over the fact that despite having a dominant position in all key minerals, a positive demand for minerals, substantial reserves and potential resources, India’s mining sector is lagging behind and suffering.

He however points out a few basic issues that are affecting the performance of the mineral sector. Irregularities in the administrative procedures, limited infrastructure and sustainability issues are some of the key factors deciding on the mineral sector in India. Despite being one of the largest democracies and having a stable government at the center, regularity practices are still not very conducive towards the growth of the mining sector. Despite the permission of the government, the participation of FDI in the mineral sector is still very low. This accounts for the lowest investment on the exploration of minerals (less than 0.5% of the global exploration expenses). The mineral sector can only improve if there is proper exploration of the mineral resources. He however, hopes that under the new government there should be some positive changes in the current situation.

In reference to the underutilized stock of coke, he insists that whatever mineral resources we produce, they are properly utilized and there is no overstocking. He also insisted on development of logistics and mining ports.

In his words, the problem being faced by the Aluminium sector is that the selling price is determined by the LME but input costs are sometimes not within the control of the producers although they try to minimize the cost. He urges the government to allow the status of a core-sector to the aluminium industry and reserve the allocation of coal block for the aluminium industry keeping in view the higher energy cost it incurs.

Inspite of having substantial reserve of good quality bauxite in the west coast, the reservations in bauxite mining and sustainability issues are creating a block in the exploration of the minerals. He also urged that the industry and the government should come together to find a solution to this situation.

He also drew attention to the fact aluminium industry should decide on whether to keep producing more and more metal and export the same or produce enough metal just to satisfy the country’s consumption. He emphasized on producing enough metal which is needed for consumption and insisted on improving the consumption rate for aluminium.

He opined that the country needs to spend more on the R&D and application of aluminium and to see that the consumption of aluminium improves. Sustainability, energy efficiency, recycling and waste disposal are some of the other important issues where the industry and the R&D can work hand in hand. In this regard he referred to the Aluminium Park that Nalco is supporting and how it is planning to cut down on energy cost by supplying molten metal straight to the downstream producers.

To sum up, he concluded that proper mineral exploration, optimum use of mineral resources and a push in consumption can pull up the GDP in India.