New Delhi, Jun 8: A just released EXIM Bank study today highlighted the huge potential of the mining sector, saying that the boom in the industry was here to stay and calls for increasing investment by private players in the domain to make mining a lucrative business. The business model should be composite in nature and not a stand-alone one and the proven mineral resources subjected to value addition and exports.
The study makes out a case for the government to evolve a comprehesive exploration policy to unearth the largely unexplored mineral wealth of the country. It indicates that the growth momentum of the sector in the last few years has largely been due to the growing worldwide demand for minerals. The new framework should be such so as to incentivise private sector and foreign investment in the field of exploration. It makes out a case for emulating the 'Mineral Exploration Tax Credit' policy operational in Canada, which will help attract the much needed exploration-oriented investment in the Indian Mineral sector.
The study calls for strengthening the State Mineral Development Corporations to finance mining and exploration related activities. The study is of the view that India being a country with a large landmass has the potential of having much larger reserves than have been identified at present.
It observes that India's exports have largely been confined to iron ore. It would be strategic to consider diversification of its export basket and focus on other minerals that have longer life index or have a larger reserve base.
This would not only help to have a diversified export portfolio but also avoid depletion of specific ores that may be critical for the development of the country in the years to come. There is also need for diversification of markets while diversifying the export basket.
India today is the third largest producer of chromium ores, with a share of 18 per cent in world production. It is the fourth largest producer of iron ore (10 per cent share); fifth largest producer of maganese ore (seven per cent share); and sixth largest producer of bauxite, zinc, and titanium (with share of seven per cent, five per cent, and five per cent respectively).
Exports of ores and minerals from India have grown from 917 million dollars in 1999-2000 to 7,028 million dollars in 2006-07, a CAGR of 34 per cent.
Iron ore contributes much of the growth witnessed in export of ores and minerals. It is the largest exported minerals from India accounting for 55 per cent of total export of ores and minerals from India.
Other major ores exported from India include zinc ores (five per cent), chromium ores (2.5 per cent), aluminium ores (2.3 per cent), lead ores (1.4 per cent), and titanium res (0.6 per cent).