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Triggering Development By Opening (New) Mines In Odisha

The mining sector alone has the potential to churn out 10 lakhs additional jobs by 2025 in Odisha itself and has the potential to reduce India’s import bills by 1 lakh crores

Photo Credit : Reuters

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The Genesis of Indian Mining sector

India’s geology is similar to that of Australia, South Africa and South America, as these were part of Gondwana Basin having a pedigree for high quality deposit of iron ore, bauxite, coal, diamonds and heavy minerals. Today, where other nations have been successful in exploring their mineral wealth with the sector contributing major chunk to their GDP, India is yet to utilize its mineral potential due to various socio-economic and even perception issues. The mineral sector contributing only about 2 percent to GDP is certainly a matter of concern since India’s geological resource base can sustain much higher levels of mineral development & economic growth. 

According to a survey by Fraser Institute Annual Survey of Mining Companies 2017 on mining and exploration companies, India ranks 97 out of 104 countries in the Investment Attractiveness Index in mining, indicating the inability to attract global investors to ‘Mine in India’. Ironically, the domestic mining sector is in stagnation on account of several policy, administrative, legal and environmental issues. These include mining bans in various states through Supreme Court orders, a low level of exploration activity, increasing imports, high taxation rates, heavy land acquisition costs, low rail evacuation capacity and imminent expiry of 288 captive mines in 2020. Such factors have put spotlight on the Indian mining sector, something that has been long overdue.

Some Proactive initiative by the Odisha government to boost its potential:

Mineral deposits is certainly Odisha’s passport to a bright & sustainable future. With the upswing in global demand for metal, Odisha is the toast of the country and perhaps the world. Few initiatives taken by the state government like Integrated Mines and Minerals Management System (i3MS) for computerized, on-line, real-time monitoring of the mines and minerals was the first of its kind in India. This initiative has been appreciated and Government of India has asked other mineral-bearing States to introduce a similar system. Odisha is the leading mineral producing State contributing to almost 14% of the mineral production of the country. The state produces about half of country’s Bauxite & Iron Ore and one-fifth of Coal. The production of minerals has increased multi-fold over last two decades. The table below illustrates a few minerals:

Mineral     

Production (99-2000) 

Production (16-17)

    



Bauxite    

Iron Ore  

Coal

2.9 MT

12 MT   

43 MT         

11.9 MT

102 MT

135 MT


This augurs well for the state of Odisha in welcoming investors to build large-scale manufacturing projects.

Unlocking Odisha’s potential for Aluminium:

Odisha alone has a potential of producing more than 50 million tons of bauxite per year as of the current capacity of 12 MTPA. The State houses more than half of India’s bauxite reserves bearing one of the finest qualities globally. Easy access to base metals, abundance of water and manpower collectively offer a conducive ambience for Aluminium production in the state. All the primary Aluminium producers of India are operating out of Odisha, contributing to its socio - economic development and towards state GDP. 

Western Odisha is blessed with natural resources where coexistence of bauxite and coal reserves in abundance offer , a unique combination ideal for Aluminium production and the potential to make India as the ‘Aluminium capital of the World’. For example, the Kodingamali bauxite mine in Koraput district – Odisha, bears a massive potential of adding INR 9000 crore to revenue to the State. Operations in Kodingamali have generated 2,500 employment and is expected to generate additional 4,000 jobs in coming years. As per the Business Reforms Action Plan rankings, popularly referred as Ease of Doing Business rankings released by Union Ministry of Commerce and Industry, Odisha has been ranked 14th at all India level under the Achievers category with the compliance percentage going up from 52.15 per cent in 2015 to 92.09 per cent in 2017. Considering India has the fifth largest bauxite reserves in the world with lion share in Odisha, it should be tapped at the earliest for accelerated development of the State. If a single mine can trigger such massive wealth, employment and development opportunities within the State, Odisha is virtually sitting on a potential generation of Rs 1 lakh crore and looking to add around 1 lakh new jobs if ten such mines are opened. 

 

Time for Action – Opening new mines in Odisha

The Odisha mining sector will play a crucial role in accomplishing the government’s visionary initiatives like Make in Odisha, Smart Cities, rural electrification, indigenous space programs, and promotion of domestic defense manufacturing sectors. In addition to these national agenda, this will also help downstream and ancillary industries through job creation, increased production, technology advancements etc. The mining sector alone has the potential to churn out 10 lakhs additional jobs by 2025 in Odisha itself and has the potential to reduce India’s import bills by 1 Lakh Crores. It is, therefore, necessary that the Government actively looks at the immense possibilities and opportunities by auctioning and opening more new mines in Odisha. It will give a fillip to the sector and push it forward the state to achieve a more sustainable and inclusive development.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.


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Ansuman Das

The author is former NALCO Chairman and Chairman & Member, Public Enterprises Selection Board , Govt of India, New Delhi

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