Development of the mining sector in India

1 Economic development

India is now the fifth largest national economy in the world and, with sustained growth, it will rank third behind the USA and China by the end of this decade. Despite significant success in the fight against poverty over the last decade, India remains a country of opposites, with an extreme contrast between rich and poor. Fig. 1 shows the forecasts for economic growth for the upcoming years according to the WEO (World Economic Outlook) issued by the International Monetary Fund in April 2023. In 2020, with 5.8 %, India had to shoulder more severe losses in its GDP than the other big national economies, but its economy has since recovered strongly and has overtaken the economic growth of China with a forecast 5.9 % growth in 2023 and 6.3 % in 2024.

The Indian government is in the process of extensively expanding the transport infrastructure. The railway’s share in goods transport is to be increased from around 27 % at present to 40 to 45 % in ten years. The number of airports has been increased since 2014 from 74 to 147, by 2035 they will number more than 200. India’s government plans to invest US$ 30 bill. in the port infrastructure of the country’s seaports. Indian Railways, the publicly owned railway company, ordered a total of 1200 locomotives for € 3 bill. from Siemens Mobility in early 2023. Air India, which is part of the Tata group of companies, has ordered 290 jets from Boeing and 250 Jets from Airbus in the world’s biggest ever aviation deal. The shipping company Hapag-Lloyd has acquired a 40 % stake in JMBPL, a leading private Indian terminal and transport service provider.

2 Overview of the mining industry

The mining industry in India is a key economic factor. The mining sector’s contribution to the gross domestic product (GDP) has recently been 2.2 to 2.5 % depending on the year. Measured against the GDP of the industrial sector overall, its share is 10 to 11 %. However, India only accounts for 3 % of worldwide mining, giving the country just tenth place in the global ranking. But India is rich in resources and has large reserves of coal, iron ore, manganese ore, bauxite, chromium and a range of different minerals. Only around 20 % of the mineral reserves have so far been extracted. On a global scale, the Indian mining industry has not yet attracted a great deal of interest. For many years, the mining sector was dominated by publicly owned companies. With privatization, the share of public sector undertakings (PSU) in mining has now fallen to under 45 %.

In the financial year 2022, the Indian mining sector grew by 12.2 % according to recent figures issued by India’s Ministry of Mines (Fig. 2). This figure shows the shares of the key sectors over recent years. In the financial year 2022, metals only accounted for 39 %, while non-metals made up 5.2 %. The largest share with 55.2 % is made up by all other minerals (especially coal and other hydrocarbons). The most important metals are iron ore, accounting for 78.1 % of sales, zinc concentrate 6.7 %, chromium 3.9 %, silver 3.5 %, bauxite 2.0 %, lead concentrate and manganese 1.8 % each, copper concentrate 0.9 % and gold 0.5 %. The most important non-metals are limestone (91.8 %), phosphorite (7.2 %) and magnesite (0.4 %). India’s Ministry of Mines is responsible for mining licences and the exploration of all mineral resources apart from for coal, natural gas, oil and uranium.

In India, 1319 mining operations are currently registered. 545 for metallic minerals and 774 for non-metallic minerals, without the energy sector [1]. Mining in India takes place in 19 states, seven of these (Odisha, Chhattisgarh, Karnataka, Rajasthan, Jharkhand, Madhya Pradesh and Maharashtra) alone generate a share of 97 % of earnings. With its many minerals and metals, India achieves a high level of self-sufficiency. Fig. 3 provides an overview based on the financial year 2021 [2]. Full self-sufficiency has been achieved for iron ore and zinc. High percentages of 76 to 95 % exist for chromium, bauxite and primary lead. 50 % of copper can also be extracted by local ore mining, for manganese, the share is only 40 %, despite relatively high production levels.

3 Coal mining

The Indian government wants to further expand coal mining to further the economic development of the country. Responsible for coal mining in India is the Ministry for Coal. Both hard coal and lignite are produced, the share of hard coal production with around 94 % easily outweighing that of lignite. Fig. 4 shows the development of local coal production and imports to satisfy India’s demand. After reaching just under 900 million tonnes per year (Mta) coal in the financial year 2018, demand has climbed to almost 1150 Mta in the financial year 2023, with a considerable increase of 13.5 % following the Covid years. Local coal production grew from 690 Mta to 893 Mta, imports having fallen from 23.2 %, after an interim increase to 25.2 % in the Covid years, to 22.1 %, which is associated with government support for domestic production.

In the financial year 2022, 65.5 % of coal was used for public sector generation of electricity, another 3.6 % was used in industrial power plants, 6.4 % went into steelmaking for the production of coking coal and just 0.7 % went into the cement industry for the production of clinker. Fig. 5 shows the major hard coal producers in the domestic market. It is clear that there are only two key producers: the public sector company Coal India Limited (CIL) with numerous subsidiaries and Singareni Collieries Company Ltd (SCCL). Besides these, there are companies that produce for their own needs, like, for example, the power company Reliance Power Limited or the steel companies Tata Steel and Jindal Steel. For lignite, the most important companies are Neyveli Lignite, Gujarat Mineral Development and Barmer Lignite Mining. In the meantime, in India, too, the debate on the phasing out of coal is rapidly gaining momentum.

In coal production in India, CIL is the company of superlatives. The company was only founded in 1975 with a production of 79 Mta. In the financial year 2023, 703 Mta coal were produced, making CIL the world’s largest company in this sector. As of April 2023, the company owned a total of 322 coal mines (Fig. 6), including 171 surface and 138 underground mines. The mines are located in 83 coal mining areas across eight states. CIL owns a total of eleven subsidiaries, including Eastern Coalfields Limited (ECL), Bharat Coking Coal Limited (BCCL), Mahanadi Coalfields Limited (MCL), Western Coalfields Limited (WCL) and South Eastern Coalfields Limited (SECL). With over 190 Mta, MCL accounts for the largest mining output of all subsidiaries. CIL produces just under 80 % of the coal in India and supplies 55 % of the power plant demand in India.

With a high ash content from 35 to 50 %, Indian hard coal reaches only low calorific values, averaging 18.4 MJ/kg, compared with 25.1 MJ/kg for coal from Australia and South Africa. Such coal is sometimes referred to as ballast coal. The relatively low coal quality and high requirements for coking coal as well as new emission standards for power plants since 2015 have led to the need for intensive washing of the coal before its use [3]. On account of the relatively high specific density from 1.4 to 1.6 g/cm³, HMS processes are suitable for this. In 2020, India had 216 Mta coal-washing capacities (Fig. 7), including 80 % for coking coal and 20 % for thermal coal. In recent years, especially the capacities for thermal coal have increased. CIL alone planned in 2022 the commissioning of nine more units with 30 Mta capacity.

4 Iron ore, manganese ore and bauxite

India has advanced to become the second largest producer of crude steel worldwide. In 2022, 79.9 Mta pig iron were produced after 76.6 Mta in 2021. Fig. 8 shows the quantities of iron ore produced in India. From 2018 to 2022, production rose from 201 Mta to 250 Mta. After the collapse in the figures in 2021 by 8.1 %, the Indian iron ore industry has bounced back with impressive growth of 22.5 %. On a global scale, with iron ore reserves totalling 5.5 bill. t, India is one of the frontrunners. The leaders in this field are, however, Australia with 51 bill. t ahead of Brazil with 34 bill. t. Over 85 % of the reserves in India are of high to medium quality and can be used directly in blast furnaces or for the production of directly reduced iron. India can meet its demand completely from its own production and also exports a small part on top.

In India, there are seven companies producing iron ore. The three biggest are the National Mineral Development Corporation (NMDC), Tata Steel and the Steel Authority of India (SAIL). In 2022, NMDC set an all-time new production record with an output of 141.3 Mta. The company operates four mines in Chhattisgarh und Karnataka. The two biggest are the BKL mine (Fig. 9) and the KDL mine, both of which recently reached a production level in excess of 50 Mta. At the BKL mine in Bailadila, the average iron content of the ore is 66 %. Tata Steel, which produces 35 Mta pig iron worldwide, most recently produced 36 Mta iron ore for its own use in the four mining operations in Jharkhand and Odisha. SAIL owns seven mines in three states and produced a new maximum output of 33.8 Mta iron ore in 2022.

With regard to manganese ore, with a production of around 2.7 Mta, India takes fifth place in the international ranking, measured on the basis of manganese yield. The average manganese content in the ore is 32 to 33 %. Fig. 10 shows the production levels over recent years. The key ore producers are Manganese Ore India Limited (MOIL) with 45.8 % market share in 2022, Sandur Manganese & Iron Ores Ltd (10.6 %) and Tata Steel (10.5 %). MOIL, a 100-% publicly owned company, operates 11 mines, seven of which in Maharashtra and four in Madhya Pradesh. All these mines are around one hundred years old. Apart from four mines, all are mined underground. The Balaghat mine is one of the biggest mines in the world (Fig. 11), having now reached a mining depth of almost 400 m from the surface. At the Dongri Buzurg surface mine in Maharashtra, a manganese ore is produced, which is used by the dry battery industry. Otherwise almost 95 % goes into steel production.

In 2022, around 68.461 Mta primary aluminium was produced worldwide according to data from the International Aluminium Institute (IAI). With a production quantity of 40.43 Mta, China alone reaches a share of 59.1 %, followed by Russia with 3.71 Mta and a 5.4 % share. With an output of 3.5 Mta primary aluminium, India is the third largest producer worldwide. For 1 t primary aluminium, depending on the quality, 6 to 7 t bauxite is needed. Fig. 12 shows the bauxite production figures in recent years for India. According to this, despite high losses in 2020 and 2021, production has risen to a total of 23.8 Mta. In the financial year (FY) 2017, production had, however, already been at 24.75 Mta. There is also notably decreasing trend in the number of bauxite mines. The most important bauxite mines are located in the states of Chhattisgarh, Gujarat, Jharkhand, Madhya Pradesh, Maharashtra and Odisha.

The most important bauxite producers in India are Hindalco, Nalco and Balco. Hindalco is part of the Aditya Birla Group and owns 20 bauxite mines in four states. In 2020, with a production output of 9.599 Mta, it produced a 40.3 % share. Hindalco is one of the biggest producers of primary aluminium in Asia (without Chinese producers) and, through its subsidiary Novelis, it is also the biggest recycler of aluminium. With a production quantity of 7.51 Mta bauxite, Nalco (National Aluminium Company Limited) reaches a 31.5 % share. Its Panchpatmali bauxite mine (Fig. 13) in Odisha extends over 18 km and holds around 310 Mt bauxite ore reserves. Third most important bauxite producer is Balco (Bharat Aluminium Company Limited), which is part of the Vedanta group of companies. Moreover, Vedanta is the biggest aluminium producer in India with 2.286 Mta.

5 Other metal ores

On a global scale, India only holds top rankings for just a few metals. These include chromium, lead and zinc. Fig. 14 shows the production figures for these metals over recent years. With a production quantity of 3.8 Mta chromium in 2022, India reached 4^th place in the worldwide ranking behind South Africa, Turkey and Kazakhstan. The key chromium producers are Tata Steel with 1.79 Mta or a 47.2 % share in production. This company operates three mines (Fig. 15) in the state of Odisha. In second place in the ranking for chromium mining in India comes Odisha Mining Company (OMC), which is a publicly owned company with a share of 30.7 %. In third place follows Indian Metals & Ferro Alloys (IMFA) Ltd with a share of 14.8 %. The other small producers include Ferro Alloys Corp and Balasore Alloys Ltd.

Hindustan Zinc Limited (HZL) is the biggest producer of lead and zinc concentrate in India. The company, which is part of the Vedanta group of companies, produced a total of 1.017 Mta lead and zinc concentrate in 2022. With this, the company reaches a market share of 51.8 % for these metals in India. In 2022, 0.246 Mta zinc was refined (Fig. 16), which corresponds to 18 % growth. The company operates four lead-zinc mines (Fig. 17), which are all located in the state of Rajasthan. In the international ranking, too, HZL occupies one of the top places. The company is the second largest integrated zinc producer in the world. Besides this, it is the sixth largest silver producer, and in addition, with the Rampura Agucha Mine, it owns the world’s largest underground zinc mining operation.

Besides the above-mentioned metal ores, in India primarily copper, gold and silver are extracted. In international comparison, however, production levels have so far not been significant. In 2022, 72.7 kt copper concentrate was produced. The biggest producer is Hindustan Copper Limited (HCL), a public undertaking with mines and processing plants distributed over five states. In the Malanjkhand copper mine (Fig. 18), there are relatively large copper reserves of 221 Mt with average copper content of 1.31 % in the ore. Another copper producer is Vedanta, the production of which, however, is currently at a standstill. For gold extraction, a relatively large project has been launched in the state of Andrah Pradesh. The Chigargunta-Bisanatham gold mine there is reported to have reserves of 1.83 Mt gold with a gold content of 5.15 g/t in the ore. The iron ore company NMDC wants to get involved in this project with an investment of US$ 60 mill.

6 Outlook

There are different estimates regarding the future development of mining in India. On the one hand, there is the economic development of India and the comparatively low utilization of existing resources up to now, which indicates good prospects for mining. On the other hand, India will not be able to avoid industrial restructuring of the economy towards climate neutrality, with corresponding challenges especially for the Indian coal, steel and aluminium industries, i.e. those industries that are currently making the biggest contribution to growth in domestic mining. Many statements made by industry on climate-neutral strategies are still missing real reduction goals and key economic data. On the other hand, the development at CIL, the world’s largest coal producer, shows that solar energy is already being produced, leading to an annual saving of around 5600 t CO₂. So far, this, of course, can only be regarded as “a drop in the ocean”.