mining report inside book - yes bank · this report is the publication of yes bank limited (“yes...

SustainableMining

Catalyst for InclusiveEconomic Growth

Knowledge Partner

YEAR July, 2014

COPYRIGHT

DISCLAIMER

CONTACTS

YES BANK Ltd.

Sanjay PalveSenior Group President & Senior MD

Tushar PandeySenior President, PSPM

Registered and Head Office

th9 Floor, Nehru Centre,Dr. Annie Besant Road,Worli, Mumbai - 400 018

Tel : +91 22 6669 9000Fax : +91 22 2497 4088

Northern Regional Office

48, Nyaya Marg, ChanakyapuriNew Delhi – 110 021

Tel : +91 11 6656 9000Email : [email protected]

[email protected] : www.yesbank.in

Federation of Indian Mineral Industries (FIMI)

R. K. SharmaSecretary General

FIMI HouseB-311, Okhla Industrial AreaPhase I, New Delhi - 110 020

Tel : +91 11 2681 4597Fax : +91 11 2681 4594Email : [email protected] : www.fedmin.com

TITLE Sustainable Mining – Catalyst for Inclusive Economic Growth

AUTHORS Public & Social Policies Management (PSPM) and Wholesale Banking (WB), YES BANK

No part of this publication may be reproduced in any form by photo, photoprint,

microfilm or any other means without the written permission of

YES BANK Ltd. & FIMI

This report is the publication of YES BANK Limited (“YES BANK”) & FIMI and so YES BANK & FIMI has editorial control over the content, including opinions, advice, statements, services, offers etc. that is represented in this report. However, YES BANK & FIMI will not be liable for any loss or damage caused by the reader's reliance on information obtained through this report. This report may contain third party contents and third-party resources. YES BANK & FIMI takes no responsibility for third party content, advertisements or third party applications that are printed on or through this report, nor does it take any responsibility for the goods or services provided by its advertisers or for any error, omission, deletion, defect, theft or destruction or unauthorized access to, or alteration of, any user communication. Further, YES BANK & FIMI does not assume any responsibility or liability for any loss or damage, including personal injury or death, resulting from use of this report or from any content for communications or materials available on this report. The contents are provided for your reference only.

The reader/ buyer understands that except for the information, products and services clearly identified as being supplied by YES BANK & FIMI, it does not operate, control or endorse any information, products, or services appearing in the report in any way. All other information, products and services offered through the report are offered by third parties, which are not affiliated in any manner to YES BANK & FIMI.

The reader/ buyer hereby disclaims and waives any right and/ or claim, they may have against YES BANK & FIMI with respect to third party products and services.

All materials provided in the report is provided on “As is” basis and YES BANK & FIMI makes no representation or warranty, express or implied, including, but not limited to, warranties of merchantability, fitness for a particular purpose, title or non – infringement. As to documents, content, graphics published in the report, YES BANK & FIMI makes no representation or warranty that the contents of such documents, articles are free from error or suitable for any purpose; nor that the implementation of such contents will not infringe any third party patents, copyrights, trademarks or other rights.

In no event shall YES BANK & FIMI or its content providers be liable for any damages whatsoever, whether direct, indirect, special, consequential and/or incidental, including without limitation, damages arising from loss of data or information, loss of profits, business interruption, or arising from the access and/or use or inability to access and/or use content and/or any service available in this report, even if YES BANK & FIMI is advised of the possibility of such loss.

Maps depicted in the report are graphical representation for general representation only.

Mining is one of the key drivers of economic development, investment and employment generation thin the country. Though India is the 4 largest mineral and iron ore producer, the sector's share in the

total GDP has remained flat at approximately 2% over the last 15 years. With over 80 billion tons of untapped mineral reserves, India's Mining & Minerals sector has the potential to contribute up to INR 11.25 lakh crore to GDP and create 15 million jobs by 2025.

The demand for various metals and minerals is expected to grow 4-5 times over the next 15 years (9-11% growth per annum) driven by huge demand stemming from rapid urbanization and growth in the manufacturing sector. Despite its enormous potential, the sector is plagued with regulatory challenges, unresolved policy issues, inadequate infrastructure facilities and environmental and capacity issues. The Government needs to augment its policy framework and encourage institutional innovation to revive growth momentum in the sector.

In this regard, the Mines and Minerals Bill will pave the way for high-tech exploration in new blocks, foster competition and ensure adequate compensation for displaced communities. Additionally, sustainable development based on a Social Equity Model is the key to ensuring that economic benefits of mining related activities are shared with the local communities in a fair and equitable manner. Further, incentivizing investments and rationalization of taxes will make India more competitive in the sector.

I am pleased to present the FIMI - YES BANK Knowledge Report 'Sustainable Mining: Catalyst for Inclusive Economic Growth' which highlights policy measures critical for the growth trajectory of the sector.

I am confident that the contents of this knowledge report will provide important insights for realizing the true potential of our resourceful Mining and Minerals industry.

FOREWORD

Thank you.

Sincerely,

Rana Kapoor

Managing Director & CEO

1. Mining as a ‘Growth Engine’ of Development .......................................................1

1.1 Mining - The Economic catalyst ..........................................................................2

1.2 Global Scenario and Developments ....................................................................6

1.3 An Indian Perspective..........................................................................................8

2. Sustainable Mining – Imperative for Socio Economic Balance ..........................15

2.1 Institutional framework under Mining– Centre and State .................................18

2.2 Policy and Regulatory Environment...................................................................22

2.3 Governance in Mining .......................................................................................25

2.4 Making Policies Sustainable for Inclusive development...................................27

3. Sustainability Practices in Mining – Case studies – India, Canada, Australia & South Africa ................................................................35

4. Mining Industry - Key Challenges ........................................................................45

5. Social Equity Model of Development – Ensuring Sustainable Growth in the Sector..............................................................................................51

6. Way Forward ...........................................................................................................57

CONTENTS

Mining as a 'Growth Engine' of Socio-Economic Development

01

1.1 Mining – The Economic Catalyst

Mining is one of the core sectors bolstering

economic development and growth. It not only

contributes to GDP but also acts as a catalyst

for growth in other core sectors like

Manufacturing, Infrastructure, Power, Steel,

Cement etc. Primary activities in the sector

therefore fuel growth in an economy. Hence, it

is important from India’s perspective to

optimally utilize its mineral resources to attain

the necessary industrial growth and achieve a

balanced socio economic development. To

achieve this it is imperative to drive

investments in scientific exploration, promote

sustainable mining practices, involve greater

private sector involvement and conduct

geoscientific research and development.

Mining as an industry has vast implications on the development of an

economy through its multiplier effect on growth. It has the potential to

influence and shape economies directly and indirectly through generation of

Mining as a 'Growth Engine' of Socio-Economic Development01

Acts as a catalyst

for the growth in

other core

industries like

power, steel,

cement, etc.

which are critical

for the overall

development of

the economy

2 | Sustainable Mining – Catalyst for Inclusive Economic Growth

employment opportunities, increasing government revenues, attracting foreign direct

investment, earning foreign exchange from exports leading to vast opportunities for driving

economic growth.

There exists strong linkages between Mining and global growth, with mining as a

prerequisite to sustain and accentuate any form of growth stimulus activity. The following

graphs display these trends:

• Close linkages between Global GDP growth and demand for Metals

Over the last few decades (1970-2009), demand for metals has been observed to follow

Global GDP time indicating a high degree of correlation between the two variables. The

figure below displays patterns of correlation.

Sustainable Mining – Catalyst for Inclusive Economic Growth | 3

Figure 1: Linkages between Global GDP growth and Demand for Metals

-30

-20

-10

0

10

20

30

Global GDP Aluminium Copper Zinc

1971 7

198 8

192

1986 9910

9914

1998

2002 6

200

2001

Source: State of the Market: Mining, Intierra RMG

% C

han

ge

fro

m p

revi

ou

s ye

ar

Case Study: Mining the 'Turnaround' story for Brazil

Mineral Exports: Brazil’s mineral exports

drastically improved its external balance from a

highly negative position in the 1990’s to a

positive one of US$50 billion by 2010.Minerals

grew to account for 33% of Brazil’s total exports

by 2010 (from 22% in 1995).

Foreign Direct Investments: Over the recent

years, the share of mining in FDI inflows has

varied between 3% and 24%. The mining sector

however does play a larger relative role in terms

of national investment.

Total Direct Employment: Total direct formal

employment in 2009 in the extractive sectors accounted for almost 300,000 persons. The

mining sector alone accounted for 232,000. This however represents less than 1% of the

total occupied labour force of Brazil. But it is important to note that in Southeast Pará,

employment was highly significant accounting for nearly 20% of total employment.

Moreover, the indirect effects are also large.

Source: The mining sector in Brazil: building institutions for sustainable development, ICMM, April 2013

The mining industry also plays a vital role in the world economy primarily due to its position

in the resource supply chain. It has been responsible for stimulating growth in many

countries and has markedly contributed towards socio economic development and poverty

reduction. Many surveys have also revealed that foreign exchange earnings from mining

have positive developmental effects. Hence, the Mining industry is gradually gaining

importance due to its spillover effects bolstering other policy objectives of job creation and

poverty reduction

Sustainable Mining – Tool for Economic growth: Mining plays a very significant role in

determining economic progress and can be used as a tool for promoting inclusive growth.

This makes the 'Sustainability' aspect of mining critical to understand and implement. The

various shortcomings of mining have made it imperative to adopt strategies and practices

which are sustainable in the long run. Community involvement in decision making and

execution is critical to ensure the benefits reach grassroot level. Moreover, sharing benefits

with local communities and consciously adopting environment friendly techniques are vital

to bolster sustainable mining initiatives.


Aim

üReturn on CapitalüRetain license to operateChallenges

üGovernment Expectations and multiple agencies

üPolicy uncertainties and bottlenecks

üGovernment requirements for royalties, taxes, profit share, and social spend can erode profitability

üInability to understand and meet community needs

Outcome

üRisk and Uncertainty

Business

Government

Mining Constituents

Community

Aim

üShare in mining wealth

üSocial growth and expansion

üPreservation of culture, heritage and environment

Challenges

üLack of effective delivery

üLimited willingness of Mining industry

Outcome

üSocial unrest and frustration

Aim

üMaximize revenue to the state

üProvide infrastructure and social services

üProtect Environment and heritage

Challenges

üMultiple agencies involved with the government

üPolicy delay, uncertainty and bottlenecks

Outcome

üLack of effective delivery to last mile communities

üLack of Revenue maximization

üJudiciary stepping in to protect community interest


Figure 2: Sustainable Mining Constituents

Source: YES BANK Analysis

1.2 Global Scenario and Developments

Over the last decade, the nominal value of world mineral production experienced a drastic

rise.

The value in 2010 was nearly four times than that in 2002. During this period the rise in the

value of world mineral production was higher than the rise in the world gross domestic

product (GDP). This was largely attributed to the exceptional performance of China, India

and other emerging economies along with the sharp rise in commodity prices. This period

contrasts with the period 1992-2002 that saw zero nominal growth after adjusted for

inflation.

Metals Mines 7,000 13,000 20,000

Aggregates 15,000 0 15,000

Coal Mines 8,000 7,000 15,000

Industrial Minerals 1,000 1,000 2,000

Total 31,000 21,000 52,000

Ore (Mt) Waste Total

Figure 4: Annual Global Output in Metric Tonnes (2013)


Figure 3: Global Exploration Projects

Source: Raw Material Database


Figure 5: At the commodity level 2013

Coal 7,800,000 85 663

Iron Ore 1,900,000 130 247

Copper 17,000 7,100 121

Gold 2.65 42,300,000 112

Nickel 1,700 14,000 24

Zinc 13,000 1,800 23

PGMs 0.48 30,300,000 15

Diamonds 0.025 580,000,000 14

Bauxite 240,000 45 11

Lead 3,600 2,000 7

Top Ten Total 9,975,000 NA 1,237

Mined (‘000t) Price (US$/t) Value PA (US$ bn)

Source: The Mining Journal, September 2013

0

200

400

600

800

1000

1200

Other Zinc Silver Gold Copper

Source: State of the Market: Mining, Intierra

Figure 6: Exploration Expenditures in the World by Commodity

Figure 7: Global Drilling Activity (Number of District Prospects Drilled)

According to the Mining Journal, September 2013, global drilling has experienced a decline

since the end of 2011 and is continuing, with drilling reports available on 1,053 prospects in

June 2013 quarter versus 1,479 in the previous quarter. This was further lower than the

2,072 prospects drilled in September 2012 quarter.

In the last few years, the Global Mining industry has experienced decline in prices with little

prospects of early recovery due to lackluster demand. In addition to significant pressure on

operating costs and a heightened threat of resource nationalism.

The scenario has further aggravated due to the restricted supply of finances, especially for

mineral exploration.



Figure 8: Market Value of Top Mining Companies (in billion U.S. dollars)

Market Value in billion U.S. dollars

1.3 An Indian Perspective

The Indian Mining sector has been recognized as

an important sector supporting India’s GDP and

catalyzing growth in the manufacturing sector. It

contributes nearly 2 percent of the National GDP. th India has also been ranked 4 with respect to the

volume of minerals produced after China, United

States and Russia according to the Report on

Mineral Production by International Organizing

Committee for the World Mining Congress. India

is a well endowed mineral abundant nation but

has still a long way to achieve is nascent

potential.

India produces about 87 minerals, of which 4 are fuel minerals, 10 metallic minerals, 47

non-metallic minerals, 23 minor minerals and 3 atomic minerals. Minerals can be broadly 1classified as fuel and non-fuel minerals . There are mainly four fuel minerals – Coal, Lignite,

Petroleum and natural gas. Atomic minerals could also be included under this category. 2These fuel minerals are mainly used for the generation of electricity .

Non-Fuel minerals can also be classified into metallic and non-metallic minerals including

minor minerals. Metallic minerals are mainly those that can be melted to create new

products, whereas non-metallic minerals are those that cannot be melted to make new

products and are mainly sedimentary rocks.

1 Source: Report on Mineral Production by International Organizing Committee for the World Mining Congress. 2 Source: www.mines.nic.in


Source: Statista, the Statistics Portal

0 50 100 150 200

BHP Billiton, Austrailia/UK

Rio Tinto, Australia/UK

Vale, Brazil

China Shenhua Eneragy, China

Xstrata, UK

Glencore International, UK

Coal India Ltd, India

Angla American, UK

Barrick Gold, Canada

Goldcorp, Canada

Newmont Mining, U.S.

1947

The Mining Sector

flourished after

independence primarily

due to the impact of

the successive Five Year

Plans

1956

The Central Government

promulgated Industrial

Policy Resolution;

The exploration of

minerals was intensified

and the Geological

Survey of India was

strengthened;

Indian Bureau of Mines

was established to look

after the scientific

development of mineral

resources

1972

Mineral Exploration

Corporation

established to

conduct exploration

with focus on coal,

iron ore, limestone,

dolomite and

manganese ore

Present

India is the largest producer

of sheet mica, the third

largest producer of iron ore

and the fifth largest producer

of bauxite in the world;

Crude steel production in

India expanded at a CAGR of

6.8 per cent over 1980-2011;

India accounted for 7.3 per

cent of the metals and mining

industry in the Asia-Pacific

region in 2011

Figure 9: Mining Scenario in India since Independence



Despite the growing importance

of the Mining sector in the

economic progress of a country,

its contribution to GDP has been

declining over time. In 1992-93,

the sector contributed 3.4% of

India's GDP. This figure declined

to 3.0% in 1999-2000 and 2.3%

in 2009-10. Over the last few

years, the sector contracted

further with its contribution

standing at about 2% in 2012-13.

As per analysis conducted for every one percent increment in the growth rate of mining and quarrying an incremental growth of 1.2 – 1.4% is observed in industrial production a n d c o r r e s p o n d i n g l y , a n approximate increment of 0.3 percent in the growth rate of India's

3GDP

3 Source: Development of the Indian Mining Industry–Way Forward, FICCI Mines and Minerals Division, October 2013


Figure 10: Mines in India

Source: CSI India

India is one of the most mineral rich countries in the world with major concentration in

Eastern and Southern India.

1.3.1 Mines in India

The Indian Mining industry comprises of several small operational mines. 3,108 mines in

India reported mineral production in 2012-13 versus 3236 in the previous year. Of the 3,108

mines reported, the 93.92% of mines were reported in Andhra Pradesh (583), followed by

Rajasthan (374), Gujarat (350), Madhya Pradesh (300), Tamil Nadu (281), Jharkhand (280),

Odisha (175), Chhattisgarh (165), Karnataka (160), Maharashtra (139) and West Bengal 4(121) .

4 Source: Ministry of Mines, Government of India, Annual Report 2012-13


1.3.2 Mineral Production

Mineral production during 2012-13 was reported from 32 States/Union Territories (actual

reporting of MCDR and fuel minerals from 21 States and estimation of minor minerals for

all 32 States/Union Territories) of which 88% of the value of mineral production was

confined to 11 States (including offshore areas) only.

2008-09 2009-10 2010-11 2011-12

Non-Metallic Minerals including Minor Minerals 25,000 30,000 40,000 40,000

Metallic Minerals 35,000 30,000 45,000 45,000

Fuel Minerals 1,15,000 1,38,000 1,55,000 1,55,000

0

50000

100000

150000

200000

250000

300000

Figure 11: Value of Mineral Production (By Groups)

Valu

e in

Rs

Cro

re

Source: Ministry of Mines, Government of India, Annual Report 2012-13

The leading position with respect to the value of mineral production is held by offshore

areas contributing a share of 21.6% to national output. This is followed by Odisha with a

share of 11.56% followed by Rajasthan (9.58%), Jharkhand (8.88%), Andhra Pradesh

(7.98%), Chhattisgarh (6.91%), Gujarat (5.95%), Madhya Pradesh (5.27%), Assam (4.45%),

Goa (3.09%) and Uttarakhand (2.72%) in the total value of mineral production. The

remaining 21 States and Union Territories have an individual share of less than 3%, together

accounting for 12% of total value during 2012-13.

116

118

120

122

124

126

128

130

132

2008-09 2009-10 2010-11 2011-12 2012-13

Index of Mineral Production (Base 2004-05 = 100)

Ind

ex

Index of Mineral Production (Base 2004-05 = 100)

Source: Ministry of Mines Annual Report 2012-13

Figure 12: Index of Mineral Production

Figure 13: Share of States in Value of Mineral production

Uttar Pradesh2%

Remaining States9%

Chhattisgarh7%

Gujarat6%

Madhya Pradesh5%

Assam5%

West Bengal4%

Offshore22%

Rajasthan13%Odisha

11%

Andhra Pradesh9%

Jharkhand7%


Source: Annual Report 2012-13, Ministry of Mines, Government of India

1.3.3 Mineral Exports in India

Given the nascent stage of mining in India, the mining industry is expected to experience

an accelerated growth in exports demand. The key minerals that are exported from India are

iron ore, alumina and chromite. As per global forecasts the demand for these minerals is

likely to increase in the near future. The following figure gives the growth predictions of

steel production, cement demand and thermal power capacity. Global demand for both iron

ore and aluminium is expected to grow at the rate of 10% whereas the global demand of 5ferrochrome is predicted to grow at 7% per annum in the coming years.

0

20

40

60

80

100

120

2005 2010 2015E

Crude Steel Production(Mn tonnes)

0

100

200

300

400

2005 2010 2015E

Cement Demand (MTPA)

Thermal Power capacity (GW)

200

150

100

50

0

Source: Morgan Stanley, Cement Manufacturers Association, Economist Intelligence Unit, Ministry of Power and Planning Commission, Government of India

Share of States in Value of Mineral production 2013-14 (Estimated)

Figure 14: Trends in Crude Steel Production, Cement Demand and Thermal Power

5 Source: Morgan Stanley, Cement Manufacturers Association, Economist Intelligence Unit, Ministry of Power and Planning Commission, Government of India


The last few years saw a significant decline in the production of minerals, especially iron

ore. After the global meltdown and export ban in Karnataka and Goa, exports of iron ore

declined markedly from 117.36 million tonnes in 2009-10 to about 60.6 million tonnes in

2011-12. The 30% export duty on iron ore and the higher railway freight charges for iron ore

exports have exacerbated exports today and have become unviable in comparison to the 6

international prices of 130 USD per tonne .

3As per the current policy, up to 64% of Fe content in iron ore is permitted to be exported .

These are mainly exported to China (nearly 90%), followed by Japan and Korea. In totality,

the iron ore consumption in India has increased at a CAGR of 15.1%. This value stood at

55.52 million tonnes in 2005-06 and increased to 111.4 million tonnes in 2010-11. Currently,

India needs at least 140 million tonnes (MT) of iron ore for its consumption and aims to 7achieve a steel production target of 300 million tonnes per annum (mtpa) by 2025 .

Currently, the mining industry in India is yet to reach its full potential as vast deposits of

minerals are mostly located in dense forest areas or areas that are considerably populated.

As per statistics, the mining areas under deep forest with avg. forest cover for 50 major

mineral producing districts is 28%. These regions also have tribal habitation. As a result,

there is a greater responsibility to ensure conservation and adopt effective rehabilitation

initiatives to ensure mining practices are environmentally sustainable. Moreover, greater

investments in exploration, research and development are critical to exploit India’s resource

base. A new programme tracking environmental parameters such as air quality, waste

characteristics, water quality etc. will be instrumental in monitoring mining activities.

1.3.4 Forest Cover under Mining

6 Source: http://steel.nic.in/policy.htm7 Source: Mid-year plan review of Ministry of Steel, GoI

7%19% 21% 25% 29% 31%

41%

60%

Bihar Karnataka India MP Jharkhand Odisha Chattisgarh Goa

Figure 16: Forest Cover in Indian States

Forest Cover as % of total Geographic area

Source: JPM India Metals and Mining, Asia Pacific Equity Research, August 2013


Figure 15: India's Forest Cover

Source: Forest Survey of India

Sustainable Mining – Imperative for Socio Economic Balance

02

Over several decades, Mining has been identified as a vital contributor to

growth and development in a country. The industry has also made key 8

contributions to employment with nearly 700,000 people employed in India .

However, the outlook towards conducting mining has evolved over time with

greater emphasis being laid on the sustainability aspect .The ‘sustainability’

idea was essentially born under the banner of the Global Mining Initiative

(GMI) in 1998 that lead to the insertion of the term ‘‘sustainable mining’’ during

the World Summit on Sustainable Mining (WSSD) in 2002. Thus, a new facet

of Mining emerged, essentially defined as:

“Mining that is financially viable; socially responsible; environmentally,

technically and scientifically sound; with a long term view of development;

uses mineral resources optimally; and ensures sustainable post-closure land

uses. Also one based on creating long term, genuine, mutually beneficial

partnerships between government, communities and miners, based on 9

integrity, cooperation and transparency .”

To ensure overall development and inclusive growth, it has become imperative

to adopt sustainable mining practices that encourage community participation

and augment rural income and livelihood. The potential sustainability issues in

Mining encompass the following aspects:

Sustainable Mining – Imperative for Socio Economic Balance02


8 Source: http://www.cci.in/pdf/surveys_reports/mineral-mining-industry.pdf9 Source: Sustainable Development Framework For Indian Mining Sector, Final Report, November 2011,

ERM India Pvt. Ltd

• Environmental Sustainability: The most vital concerns in environmental sustainability

include usage of energy and water by mining companies and the impact of mining activities

on biodiversity, global warming and climate change. Waste management is critical as open

pit mining creates major disruptions to the landscape and current techniques of

rehabilitating the pits is expensive. It has therefore become imperative to scrutinize the

environmental impacts of suppliers’ practices and transportation of materials and worker

actions to ensure mining practices are environmentally sustainable.

• Social Sustainability: Worker health and safety is a major concern for the mining

industry. Worker and community

s a fe t y ; H I V / A I D S r e d u c t i o n s ,

stakeholder engagement; policies

related to life cycles of mining

operations and human rights are key

focus area. Companies will be

required to preserve indigenous culture

and heritage as most of the mines are

situated in areas with indigenous

populations. Additionally stakeholders

concerns mining communities need to

be redressed immediately .

• Economic Sustainability: Over the years, mining companies have faced several

criticisms claiming that they don’t operate in ways that bolster long term economic

sustainability. Operating irresponsibly in the social and environmental spheres tend to

generate mistrust in these companies which in turn harms investor confidence in these



companies and damages their reputation, therefore exacerbating their investment potential.

To ensure economic sustainability, mining companies are challenged to ensure sustainable

growth of local communities through institutions and infrastructure that support

communities beyond the life cycle of the mine. Identifying areas of particular significance in

terms of economic development, outlining policies focused on assessing the contribution

of mining companies to communities and ensuring that goods, materials and services are

drawn from local communities is critical for economic sustainability.

With several benefits associated with mining in India, focus should be on providing open

and transparent data on tax and royalty and how these benefits have been distributed at

the local, regional and national levels. The

Governments should look at adopting

effective mechanisms that maximize

transparency, understanding and acceptance

of how direct financial flows from mining

activities are allocated in ways that are

appropriate to their political and legal

systems.

India’s mineral development history is as old as civilization with mining activities being

traced as far back as 6,000 years. The presence of the ruins of old mine workings are a

witness to this fact. A few of these workings have also been the reason for some of the

major discoveries of mineral deposits.

However, the major thrust to the mineral

development occurred only after 1947

when India gained political independence,

when the impor t ance of minera l

development in nation building was

recognized. Identifying the significance of

the role of mining in growth and

development, the Central Government

enforced the Industrial Policy Resolution in

1956 under which several industries were

aimed to be developed for which increasing

quantities of minerals were required.

2.1 Institutional framework under Mining– Centre and State

2.1.1 Background


To acknowledge the immense potential of this sector, the Government of India has

consciously opened private investments to boost funds and attract technological and

managerial expertise. This has increased global interests in the Indian Mining sector and led

to opening up of the industry to Foreign Direct Investment after the New Mineral Policy,

1993.

The Ministry of Mines undertakes surveys and

exploration of all minerals except natural gas,

petroleum and atomic minerals; mining and

metallurgy of non ferrous metals like aluminum,

copper, zinc, etc.

The list of subjects allocated to the Ministry of

Mines, Attached Office, Subordinate Office, Public

Sector Undertakings and Research Institutions under

the administrative control of Ministry of Mines are

given below:

2.1.2 Institutional Framework Today, nearly 80% of

the mining is done in

coal and the remaining

20% is done in various

metals and raw

materials including

copper, bauxite, iron,

gold, lead, zinc

Figure 17: List of Subject allocated to Ministry of Mining and other Associated Bodies

Source: Ministry of Mines, GoI

Legislation for regulation of mines and development of minerals within the territory of India, including mines and minerals underlying the ocean within the territorial waters or the continental shelf, or the exclusive economic zone and other maritime zones of India as may be specified, from time to time by or under any law made by Parliament

Regulation of mines and development of minerals other than coal, lignite and sand for stowing and any other mineral declared. As prescribed substances for the purpose of the Atomic Energy Act, 1962 (33 to 1962) underthe control of the Union as declared by law, including questions concerning regulation and development of minerals

All other metals and minerals not specifically alloted to any other Ministry/Department, such as aluminium, zinc, copper, gold, diamonds, lead and nickel

Administration and Management of Indian Bureau of Mines

Planning, development and control of, and assistance to, all industries dealt with by the Ministry

Administration and Management of Geological Survey of India


The following are organizations associated with the mining sector.

Organization in Survey and Exploration

• Geological Survey of India (GSI)

This organization of earth science studies, set up in 1851 is the subordinate office of the

Ministry of Mines, Govt. of India. GSI provides vital earth science inputs into all aspects of

national economic development.

• Mineral Exploration Corporation Limited (MECL)

Established in 1972, the Mineral Exploration Corporation Limited (MECL) is the foremost

exploration agency in the country conducting exploration activities. The exploration activities

are primarily carried out under promotional programme sponsored by the Government of

India on behalf of agencies including the State Government and Public & Private Sectors.

Nearly 144681 million tonnes of mineral reserves was added to the National Mineral 10

Inventory till December 2011 .

Geological survey and

mineral prospecting

Petro logical & ore

dressing studies

Exploration

Assessment of reserves & grade in lease

hold areas

Detailed exploration by drilling

Figure18: Exploration Process


Organizations in Regulation and

Conservation

• The Indian Bureau of Mines (IBM)

The IBM is a subordinate office attached

to the Ministry of Mines. It is

respons ib le fo r p romot ing and

conserving minerals, protecting mines

e nv i r o n m e n t a n d s c i e n t i f i c a l l y

developing the mineral resource of the

country other than coal, petroleum and

natural gas, atomic mineral and minor

minerals.

10 Source: www.mines.nic.in


In addition to the above, there

a r e s eve r a l a u t o n o m o u s

research institutions associated

with the Ministry:

a) National Institute of Rock

Mechanics (NIRM), Kolar

Gold Fields (Karnataka)

b) National Institute of Miners'

Wealth

c) Jawaharlal Nehru Aluminium

Research Development and

Design Centre (JNARDDC), Nagpur

A very extensive role is played by the State Departments of Geology and Mining in the

process of exploration for minerals, regulation and mineral administration

Figure 19: Mineral Administration Process


Mineral administration

Collection of mineral revenue & dead rent

Stoppage of illegal mining and illegal transportation of

minerals

Grant of mineral concessions

Ensuring systematic & scientific mining, plantation,

environment conservation and welfare schemes for

mine laborers.

Royalty assessment collection


All the major minerals in India come under the domain of the central government and the

minor minerals come under the domain of the State Governments who have formulated

mineral concession rules for this rationale. In the federal structure, the State Government

owns the minerals in their respective territorial jurisdiction. Whereas the Central

Government holds rights in off-shore areas, exclusive economic zones and the continental

shelf.

Management of mineral resources is the responsibility of both the Central Government and

the State Governments in terms of Entry 54 of the Union List (List I) and Entry 23 of the

State List (List II) of the Seventh Schedule of the Constitution of India.

The Mines & Minerals (Development and Regulation) (MMDR) Act, 1957 (MMDR Act) is the

main legislation laying down the legal framework for the regulation of mines and

development of all minerals other than petroleum and natural gas. The Mineral Conservation

and Development Rules, 1988 (MCDR) and Mineral Concession Rules, 1960 (MCR) are

supplementary legislations, governing the Indian Mining industry (except Coal, Lignite,

atomic and minor minerals). Mining and consumption of Coal and Lignite is governed by the

Coal Mines (Nationalization) Act, 1973 and subsequent amendments.

MMDR Act was enacted when the Industrial Policy Resolution 1957 was the guiding policy

for the sector, and thus was aimed primarily at providing a mineral concession regime to

Mining industry which was dominated by public sector undertakings (PSUs).

After liberalization in 1991, a separate National

Mineral Policy was drafted in 1993 (NMP 1993)

which encouraged the role of the private sector

in exploration and mining. NMP 1993

recognized the need for encouraging private

investment including Foreign Direct Investment

(FDI), and for attracting state-of-art technology

in the mineral sector. The policy stressed that

the Central Government, in consultation with

the State Governments, shall continue to

formulate legal measures for the regulation of

mines and the development of mineral

resources to ensure basic uniformity in mineral

that development of mineral resources was

aligned to the national policy goals.

2.2. Policy and Regulatory Environment

2.2.1 NMP 1993


To achieve these objectives, MMDR was amended twice in 1994 and 1999 alongwith

MCDR and MCR). Introduction to include opening up foreign investment in exploration and

mining, of the concept of reconnaissance, as a stage before prospecting, empowerment of

State Governments in granting/extending mining leases, making rules to curb illegal mining,

etc. However NMP 1993 did not achieve its objectives as share of the private sector did not

increase significantly.

To address the shortcomings of NMP 1993 and provide a fillip to private investment, the

Central Government formed a High Level Committee in 2005/06 under Mr Anwarul Hoda

(Hoda Committee). The report submitted by the Hoda Committee provided inputs for

promulgation of the National Mineral Policy in 2008 (NMP 2008).

National Mineral Policy 2008 enunciated measures like changes in the role of the Central

Government and the State Governments to incentivize private sector investment in

exploration and mining. It also assured right to next stage of mineral concession,

transferability of mineral concessions and transparency in allotment of concessions in order

to reduce delays, encourage investment and technology flows in the mining sector in India.

NMP 2008 also sought to ensure mineral availability through augmentation in reserve base,

improvement in mining methods, beneficiation and utilization of low-grade ore, rejects and

recovery of associated minerals. Lastly, NMP 2008 also sought to develop a Sustainable

Development Framework (SDF) for optimum utilization of mineral resources for industrial

growth while it sought to protect the interests of the local population in mining areas.

Since the MMDR Act and its subsequent amendments would not have clearly reflected the

objectives of NMP 2008, the Central Government decided to introduce the draft MMDR Bill,

2011 for enactment to replace MMDR Act

1957. However, the Central Government’s

inability to push the Bill through during the th

tenure of the 15 Lok Sabha has resulted in

to lapse Bill and with it the proposed

reforms it tried to implement. Key features

of the lapsed MMDR 2011 Bill included:

• Implement a simple and transparent

mechanism for grant of PL or ML

through competitive bidding

2.2.2 NMP 2008

2.2.3 Draft MMDR Bill, 2011 and current state


• Provide for sharing of profits and royalty with project affected persons (PAP) / local

community through creation of District Mineral Fund (DMF)

• Introduce better legislative environment for attracting investment and technology

• Set up a National Mining Regulatory Authority (NMRA) with responsibilities including

advising the government on aspects of quality standards, mineral conservation

strategies, review of existing royalty rates, sustainable mining, etc

• Set up National Mining Tribunal and State Mining Tribunal to exercise jurisdiction, powers

and authority proposed in the new legislation

• Establish National Mineral Fund (NMF) out of the proceeds of the cess levied by the

Central Government

• Facilitate land acquisition process for mining projects among other things

• Encourage sustainable and scientific mining through provision for Sustainable

Development Framework (SDF).

The new Union Government would have its task cut out in initiating the entire process of

introducing and passing a new MMDR Bill.

NMP 2008 aimed to balance the needs of economic development through mining as well as

needs of protecting the forests, environment, ecology, host and indigenous populations by

ensuring all mining is undertaken within the parameters of a comprehensive Sustainable

Development Framework. The overall guiding principle shall be that a miner shall leave the

mining area in better ecological shape than originally found.

2.2.4 Sustainable Development Framework (SDF)


For ensuring implementation success, the SDF was designed with a strong base in the

existing laws that allow several parts of the framework to be legally enforced, and all of the

principles were mandated under the draft MMDR 2011 Bill.

Mining issues in India generated

widespread controversies internationally.

These issues span across encroachment

of forests; underpayment of government

royalties; and conflict with tribals

regarding land rights. This has also lead

to problems such as Naxalism and

distortion of Indian democracy by mixed

political and mining interests. More

recently, the mining industry has been

plagued with issues relating to rampant

illegal mining, rehabilitation of original inhabitants, adequate land compensation policy and

under declaration leading to loss to exchequer.

These increasing concerns on illegal mining in India have therefore made it imperative to

ensure the strict enforcement of mining laws. Enforcement has been identified as a key

drawback and the biggest point of criticism from all stakeholders. Hence, better

enforcement rather than more regulation can help remedy the ills plaguing the mining

sector in India. It is also crucial to take a holistic view of the current situation and analyze it

in terms of global background to arrive at a Social Equity Model to enable a sustainable

environment of development.

The Indian Mining sector has been

facing severe criticism with respect to its

contr ibution towards sustainable

development. Notably, most of the

mining activities are undertaken in the

poorest districts and very little benefit

has been passed on to the local

communities that too at the cost of

environmental degradation. Moreover,

inadequate policing and legal and

regulatory loopholes has helped illegal

mining activities flourish in the country

2.3 Governance in Mining

2.3.1 Regulating the Indian Mining Industry


As far as environment conservation is concerned, the process by which activities have been

undertaken by the mining sector have been questioned. The intensive use of land has laid

significant pressure on the environment which has severely compromised the quality of life

local communities. The Mines and Minerals (Regulation and Development) (MMRD) Act of

1957 and the rules framed under it have provisions to ensure environmental integrity in

mining operations however more emphasis needs to be laid on their enforcement.

In the light of current governance issues, policy changes in mining towards making policies

more sustainable and inclusive are critical. Public policy enabling inclusive sustainable

development by sharing the benefits derived from the mineral resource with the community

at large will positively affect the growth outlook of the sector.

Globally these debates have led to the drafting of

new policies which derive from the policy of

community participation and benefit sharing, as well

as ensuring that benefits of windfall profits are

shared with the society at large by taking into

account the economic rent from such activity. An

attempt to nationalize private mining companies has

proved to be unsuccessful in few countries namely 11Bolivia and South Africa. While there has been

11 Source: Wall Street Journal, April 2011


considerable opposition to such suggestions in those countries, the existence of these

debates and policies indicate an urgent need to address the issue of greater public

participation in the economic benefits of natural resources.

Evidently, there is a need for India to adopt policies that achieve social, economic and

environment sustainability to further thrust the growth trajectory of Mining.

The ‘Sustainability’ concept in mining is multifaceted, encompassing economic, social and

environmental aspects. Mining is critical for employment and revenue generation in many

developing nations is bolster economic sustainability. However, its negative impacts on local

communities and the environment have ushered the need for adopting mining practices

that conserve natural surroundings and promote environment sustainability. Growing

evidences have indicated the severity of the imbalance of ecosystems, posing new and

challenging risks. The problem of poverty has also been seen as inseparably linked with

global ecological problems which cannot be solved unless people have a stake in the

outcome and the resources to manage the problems.

Globally countries have been trying to put in place a mechanism to enable an environment

of socio economic growth along with development. A mechanism of sharing the benefits

which arise from resource is designed by making social commitment in form of royalty

charge payable by resource developer. An analysis of some of these policies is undertaken

below:

• Sustainable Mining Practices in Ghana: In Ghana, a minerals development fund has

been created to ensure a certain portion of government income is transferred to the

local communities directly affected by the mining activities. Moreover, companies that

apply for mining rights require conforming to a detailed recruitment and training

programme.

• Petroleum Fund in Norway: The Petroleum Fund created in Norway allows for three

quarters of current revenue to be saved for higher yields with none allotted to particular

projects or benefit sharing. This pressurises high-quality and well-governed institutions

which are involved in managing natural resources for the greater good.

• Royalty taxes in China: In support of inclusive development, China levies mainly two

royalty taxes. One is directly deposited with the national treasury and the second

named ‘mineral resource compensation fee’ which is collected by the concerned level 12

of country, provincial or city government .

2.4 Making Policies Sustainable for Inclusive Development

12 Source: China, Regulations for the Collection and Administration of the Mineral Resources Compensation Fee, N.150. 1994


Understanding sustainable development

Creating organisational policies and management systems

Achieving cooperation among those with similar interests

Building capacity for effective actions at all levels

Step 1

Step 2

Step 3

Step 4

Supp

rtg

sst

aina

ble

deve

lop

ent

oin

u

m

in th

e m

iner

al s

ecto

r

• Mining receipt distribution in Indonesia: The distribution of state receipts from

natural resources entail 20% to central government and 80% to the region. This 80% is

then distributed into two parts - 64% to regencies and 16% to the provincial

government.

• Sustainable Mining initiatives in South Africa: In South Africa, mining companies are

mandated to accompany their mining rights applications with social, labour and work

programmes at the mineral development stage. The success of these programmes is

monitored through annual reports in order to ensure goals are met.

Source: International Institute for Environment and Development - www.iied.org

Figure 20: Sustainable Development in Mining


Format China Botswana NSW

Source: “Mining Royalties – A Global Study of their impact on Investors, Government and Civil Society” by James Otto et al

Figure 21: Summary of Royalty Practices in Selected Countries

Two Types :

üRoyalty: unit

based plus

üMineral

resources

compensati

on fee: ad

valorem

based

Brazil

Ad Valorem Ad Valorem

(NSR)

Ghana

Ad Valorem

(sales

revenue)

Ad Valorem;

but profit

based

royalty in

the

Broken

Hill

District

Queensland

Ad Valorem or

unit based

Royalty

type

(most non

constructi

on

minerals)

Ad

valorem

rate range

ü

ranges for

each

mineral,

expressed in

yuan/tonne

ore, plus

ü2: 1-4%

depending

on mineral

Various 0.2-3.0% 3-10% 3-12% 4-7% ad

valorem

2.7% of

value, or a

variable

royalty rate if

price exceeds

a reference

price

Variation

Minerals

Yes

üRanges of

unit charges

for each

mineral, plus

üAd valorem

rate for each

mineral

Yes

üAluminium

ore,

manganese,

salt,

phosphorous

: 3%

üIron, fertilizer,

coal, and

remaining

minerals: 2%

(except 3)

üPrecious

stones,

diamond,

and noble

metals: 0.2%

üGold:1%

Yes

üPrecious

stones:

10%

üPrecious

metals:

5%

üOther

minerals or

mineral

products:

3%

Yes

üPrecious

stones:

10%

üPrecious

metals:

5%

üOther

minerals or

mineral

products:

3%

Yes

üCoal:5-7%;

industrial

minerals

$A 0.35-

0.70/ tone

üOther

minerals:

4%

Yes

üMost

metallic

minerals:

2.7% of

value or a

variable

royalty

rate

üIndustrial

minerals:

$A 0.25-

1.00/ tone;

coal:7%


In addition to the above sustainable mining practices it is important for policy makers to

assess the taxation system under mining:

• The cumulative impact of taxes on future investments in mining need to be taken under

consideration. The overall taxation system should be globally competitive and equitable

to both the nation and the investors.

• Mining companies can play a major role in influencing Government decisions regarding

taxation. Issues including potential overall investment, closure of marginal mines and its

implications, changes to the national mineral reserve base and similar issues can be

communicated with the Government which could help them take better informed

decisions.

• Investor preferences need to be understood and foreign direct investment need to be

incentivized to attract capital inflows and differentiate India from other nations.

• Taxation systems should also enable companies to adopt sustainable mining practices

at both the community and regional level

Overall, from a macroeconomic perspective, the goals of the government should aim to

maximize the net present value of the social benefits from the mining industry in the long

run that is not only limited to Government tax receipts.

Price and

Currency

Volatility

Sharing the

Benefits

Infrastructure

Access

Capital

Projection

Execution

Capital

Allocation

and Access Margin

Protection and

Productivity

Improvement

Resource

Nationalism

Social

Licence to

Operate

Skills

Shortage

PolicyFocus


Figure 22: Policy Focus in Mining


It is important to strike the right balance, if taxation is too high, investment and the tax base

will diminish as investors would move to more profitable alternatives, and if the taxation

level is too low, the nation will lose out on serving public welfare.

Similarly, it has also become imperative for the Indian mining industry to ensure long-term

economic sustainability. Local ‘Community Involvement’ has been identified critical for

‘Inclusive Growth’ as it encourages economic independence and enhances standards of

living. Infrastructure and institutions also need to be augmented to ensure that communities

are economically sustainable. This should go beyond the life-cycle of mining operations.

Moreover, all payments should be encouraged to be reflected transparently and payments

released to the society should be based on needs of stakeholders.

Environment conservation and land rehabilitation have also emerged as major areas of

concern. Environment and resource degradation, and extraction activities have disrupted the

natural environment, contaminating waterways and overall affecting biodiversity negatively.

Occupational health hazards are other aspects that need attention.

The vitality of Skill development is crucial to understand. An important mechanism to

overcome the impending challenges is improving the operational performance of mining

companies through asset management, asset utilization and optimization, shared services

approach and managing costs.

Source: http://www.miningandtheenvironment.com/res_artwork.aspx

Figure 23: Towards Sustainable Mining-Community Involvement


Key production costs for mining companies comprise of stores and consumables; repairs

and maintenance; power costs; manpower and mine development. Stores and

consumables, repairs and maintenance, power and manpower costs contribute 90-95% of

mining companies’ production costs. The mining companies need to focus on the following

areas to optimize costs:

• Overall equipment effectiveness improvement

• Energy efficiency

• Manpower efficiency

• Logistics costs

• Working capital management

Besides undertaking productivity enhancement measures, the Indian Mining Industry

clearly needs to focus on developing qualified mining professionals and a skilled resource

base. India must take multiple steps to bridge the impending shortage of human capital in

mining, especially for mining engineers, diploma holders and skilled/semi-skilled labor.

Some other areas of focus include:

• Encouraging Private Sector Participation: In 1993, the National Mineral Policy did not

focus on creating equal opportunities for private sector participation. Public sector

companies were always given priority in the allocation of licenses.

• Introducing Government Concessions: The Policy did not provide for any tax

concessions for exploration expenditure or motivate companies to raise funds for

exploration.

• Delineating Laws: Several overlaps in the relative roles of the states and the centre are

observed.

• Simplifying Complex Procedures: The procedures involved in clearing mining leases

are usually quite complex and time consuming. They involve approvals from both the

state and central levels including clearances as per the MMDR Act, MCR, MCDR and

the Forests (Conservation) Act, Environment (Protection) Act.

• Ensuring Tenure Security: No fixed tenure exists between the Prospecting licenses

and Reconnaissance permits stage. The preferential right for conversion from one for to

the other did not assure an exclusive right to mine any deposit found within the area

covered under the Reconnaissance permit or the Prospecting license.


• Adhering to Time Limits: No fixed time limits exist for grants of permissions. The usual

time taken between applications and approvals range from six months to three or more

years.

Hence, a new integrated system of governance could fuel the sustainable development of

the industry. New guidelines and voluntary codes are critical to ensure responsible mining

practices in regions where the Government of India is unable to regulate mining activities.

The premise is that there is a need to develop a model of development which maintains a

balance between social, economic and environmental factors in order to achieve sustainable

development in the mining sector.

Sustainable Practices in Mining – Case Studies

03

A. Tourism as Model of Sustainable Development - 13‘Mining Tourism Route’, Chile

Coming 2015 Chi le is

expected to capture on the

world tourist population

with launch of ‘Mining

Tourism Route’. Aimed at

bringing the world closer to

mining through tourism, the

initiative is looking to build a

sus t a inab le mode l o f

development and economic

growth.

The mines which are

expected to open are

Chuquicamata – the largest

surface mine in the world that’s in the Antofagasta region – 1,585 kilometers

north of the nation’s capital of Santiago along with 23 other mines in the

region. Chile has abundance of both surface and underground mines in

Antofagasta, which extract various resources like sulfur and saltpeter, gold,

Sustainable Practices in Mining – Case Studies03


The Chuquicamata mine in northern Chile is the world's

largest surface mine and one of the main attractions on the

Mining Tourist Route, which will be launched in 2015.

13 Source: Corporación Nacional del Cobre, Chile

lithium. All these would form part of the Mining Tourist Route which is expected to open in

2015. There are in total 19 large mining, 20 medium-sized, 540 small mines and 100 micro-

mines developments in the Antofagasta region.

An initial public-private investment of $33 million Chilean pesos (about US$58,000),

provided by the National Fund for Regional Development (FNDR) and mining companies,

was allocated for the Mining Route last year.

During the Mining tour, visitors would be exposed to various mining activities and

processes which would help them develop more informed knowledge about mining

activities and its impact. This would enable corporate to demonstrate the work they are

undertaking to people in general. Along with promoting Mining tourism in the region the

tourists would be encouraged to visit the Los Flamencos National Reserve or a vineyard in

the district of Toconao in the San Pedro de Atacama, about 340 kilometers from

Antofagasta. Route, created by the Antofagasta Regional Branch of the National Tourism

Service (Sernatur) in collaboration with mining companies and the Regional Ministerial

Secretariat for Mining.

The lifecycle of a mine can span decades

and even generations.

PT Newmont Minahasa Raya’s (PTNMR)

support to Tourism at Lakban Beach in

Indonesia is one example of creating a

sustainable environment involving local

communities beginning with exploration and continuing well after the mine closure.

In 1996, PTNMR began gold mining production at the Mesel Gold Mine in North Sulawesi.

By the year 2004 all mining and processing activity at Mesel had ended; most closure

activities were finished in 2006; and closure monitoring was completed in 2010. Even post

completion, PTNMR continued to fulfill a number of obligations under the Contract of Work

(CoW) with the Government of Indonesia.

B. Building a Tourism Eco System for development - PT Newmont Minahasa Raya (PTNMR),

14Indonesia


PT Newmont Minahasa Raya Supports Tourism

at Lakban Beach in Indonesia

14 Source: http://www.newmont.com/our-voice/post/study-sustainable-development-after-mine-closure


Tourism Model: Reef Restoration

Tourism as a tool for sustained

development was the key activity

area undertaken by PTNMR.

Reefballs were donated by PT

Newmont Minahasa Raya in Buyat

Bay to stimulate reef growth and

support diving tourism. PTNMR also

e n a b l e d a n d f u n d e d t h e

construction of the largest artificial

coral reef program undertaken by a

private company, which included

more than 3,000 reef balls to be

deployed in Buyat Bay and Totok Bay. Support was received from the Tourism Office of

South Minahasa in order to undertake mapping of existing coral reefs in both bays more

than a decade ago. This enabled in increasing fish stock in the region, reducing reef loss,

which enabled in developing and sustaining livelihoods of local fishermen. These activities

helped over the years in creating an environment where underwater tourism in the region

was highlighted and promoted.

Agro forestry activities: PTNMR promoted agro forestry related activities by ensuring that

the reclaimed land was redeveloped as a forest area. For this purpose the company

delivered nearly 450 hectares of reclaimed mine area to the Government of Indonesia. This

area is now a secondary forest which provides high-value species such as mahogany, teak,

nyatoh and sengon to the economy of the region. This reclamation exercise has ensured

long-term sustainable economic benefit for the region and has ensured maintenance of

ecological balance in the region.

Other Initiatives: To help reduce the fishermen’s costs and improve efficiencies and

product quality, PTNMR built a much-needed cold-storage and ice block factory in the

location formerly used as the mine’s port.

Measuring Success

PTNMR’s work with Buyat, Ratatotok and the surrounding communities is an example of

sustainable practice in mining which has enabled economic and social development of the

region from a long term perspective. Through this type of collaborative approach to

development, the company aims long-term economic, environmental and social

sustainability for our local communities.

Reefballs donated by PT Newmont Minahasa Raya in Buyat Bay

stimulate reef growth and support diving tourism


C. Reclamation of Mined out land - Sesa Goa’s Sanquelim 15mine, India

One of the important activities for sustainability involves reclamation and rehabilitation of

mined out and degraded land

A project in this direction has been undertaken by Sesa Goa for rehabilitation of mined out

or degraded land, in their Sanquelime mines (106 out of 203 hectares) in Mauliguem Village

of Bicholin taluka in North Goa. The mining operations were started in 1960 by Sesa Goa

and with the exhaustion of resource the mine got closed in 1988. At present no mining

activity is in operation in this area. This site has been completely reclaimed by now

Eco Tourism Spot: The sustainable

practices for converting the region

into an Ecotourism spot has set a

benchmark for other min ing

companies all over the country to

follow. All the best practices in

rec lamat ion, agr i -hort icu l tura l

approach, water body development,

pisciculture and development of

medicinal plants garden, have been

adopted. Exhausted mining pit has

been converted to a pond for

pisciculture and horticulture species

of the Goan region (cashew, mango,

coconut, jackfruit etc.) have been grown on waste dumps along with spice plantations and

medicinal plants.

Eco Tourism Spot: 106 hectares converted into a model reclaimed mine.

15 Source: Sustainable Development Report by Institute for Studies in Industrial Development

Nakshatra Devata Udyan is based on the 27

Constellations (Nakshatras).


These are irrigated by rainwater harvested in the mining pits. Athletic facilities like

playgrounds, football academies and even a technical/industrial training schools have been

established on the reclaimed land.

Social Development Work: Apart from developing the mined out land, the company is

using the developed mine infrastructure for various social development works after the

closure of mine. The foundation has established the Sesa Technical School and two football

academies on the reclaimed mined-out area in Sanquelin. The students passing out of the

technical school are specialist in the field of machinists, instrumentation, electricians and

instrument mechanic, and are finding placements in large corporate both Indian and multi-

national.

Engagement with communities is an

ongoing and long-term process,

wh ich needs to t ake p l ace

throughout the life of a mining

project. Xstrata Coal, a mining

company has put in place a vineyard

monitoring program for its Bulga

Coal mine region. The coal mine

location is in the Hunter Valley, New

South Wales, known to be one of

Aust ra l i a ’s best -known wine

producing regions. In the mid-1990s,

Xstrata applied for coal exploration licenses to investigate an area beneath 40 commercial

vineyards and near a significant local watercourse.

Early on in the mining project the company

ensured that communication with local

people was established to allay any fear

and concern. Mining under operational

vineyards was a first for Australia, and local

residents expressed concerns about the

potential impact on local viticulture and

water resources.

Xstrata used collaborative approach and

formed a specific project team and a

community consultation committee. Taking

D. Community Engagement: Xstrata Coal, New South Wales, Australia

Xstrata Coal environment & Community manager

with Wines grower

Trial being done above the former South Bulga Colliery


inputs from the community, academics and consultants, Xstrata using the demonstrative

approach constructed a simulated vineyard over the existing South Bulga underground mine,

to assess the impacts of subsidence on the vineyard infrastructure. It kept stakeholders

regularly updated on the progress of viticulture trials. Xstrata then established a

comprehensive consultation program for the ongoing management of the mine.

Grapes used in Hunter Valley wines are growing above Glencore Xstrata’s Beltana No 1 mine,

which is one of Australia’s most productive underground coal mines. Glencore Xstrata has

been mining successfully under about 90 ha of vineyards since 2005. Seven vintages have

been produced since mining began, with little or no impact on the quality of grapes

produced, and the vineyards produce up to 250 000 bottles of wine a year.

The importance of preserving culture and heritage has gained momentum in the recent past

with focus towards retaining the old art and form of the same. This has been viewed as

common thread which binds the community together.

Since the early days of the mining operation, social impact assessment studies in the region

had expressed concerns by community leaders about the need to strengthen and preserve

Lihirian culture.

Located on the largest island of Lihir

Group of Islands in Papua New

Guinea, the L ih i r go ld mine

commenced operation in 1995. The

operations were owned by Lihir

Management Company (LMC), a

wholly owned subsidiary of Rio Tinto.

Later in 2005 Lihir Gold Limited

(LGL) assumed ownership and

management of the same and which

was later merged into Newcrest

Mining Limited.

Efforts have been made by the

mining company in the region to preserve and promote cultural heritage by undertaking local

cultural programs, which included the establishment of a cultural awareness office within the

company’s community relations department. Lihir Gold limited supported Lihirian cultural

heritage plan (2008), an initiative of group of committed Lihirians, together with a support

16E. Preserving cultural heritage: Lihir Mines, Papua New Guinea

16 Source: Department of Resources, Energy and Tourism & Austrade

An elderly of the tribe standing beside Kabelbel Canoe

on day of Launch of Lihir Cultural Heritage plan


team comprising an anthropologist, an historian, an ethnomusicologist and a heritage

specialist. The group held meetings and workshops with locals to develop the plan. This

plan was also given the Lihirian title: A irir wana mamalien a anio Lir, which means ‘A plan

for social stability and harmony on Lihir’ (see Bainton et al 2011).

The company undertook documentation of major sacred sites and cultural practices and

organised various cultural festivals. A Lihir-wide representative cultural heritage committee

was established to undertake these activities. In mid-2009, an island-wide workshop was

held to enable the committee to develop a draft cultural heritage management plan (CHMP)

aligned to internationally recognised heritage standards. CHMP created the association

which has since completed a number of projects in the area of cultural heritage leading to

harmony and development at the same time.

The baux i te min ing p ro jec t

undertaken by Aloca in the Juruti

region of Brazil has been receiving

accolades for setting new standard

and benchmark for sustainable

development affecting positively the

social and economic conditions in

the local community and enhancing

environmental conditions.

The region is inhabited by 47,000

people, with 65% of them living in

around 150 rural communities. The

economy has traditionally been

dependent on fishing, cattle-raising, Brazil nut extraction, and subsistence agriculture.

The project was started in 2009, involved in extraction of bauxite being evacuated by port

along the Amazon River, and a rail port connectivity of 55-kilometer for transportation of

bauxite from the mine to the port.

Alcoa launched its sustainable program for the region under the program known as the

“Sustainable Juruti Program”. The program is a proposed model for mining and local

development in the Amazon, and is primarily based on three sustainability principles:

respect for the environment, social responsibility, and economic success. The concurrent

implementation of (i) a Council, (ii) Development Metrics, and (iii) a Development Fund is

F. Setting sustainability benchmark - Juruti Mining Project, Brazil

Juruti Mines at Brazil – Setting newer standards in mining


unique to Alcoa and to the Amazon region, although the concept is now being applied to

some of the other mega-projects in this region, notably being hydro projects along the

Madeira River.

Alcoa's approach to educate residents about the project and solicits their input was the key

in changing opinion in favor and providing the organization with right inputs. To further this

principle Alcoa conducted two opinion surveys, held three public meetings attended by

almost 8,000 people and almost 70 additional meetings with community members, and

implemented a far-reaching communications program. Alcoa also conducted extensive

surveys, studies, and field research. The Sustainable Juruti Council (CONJUS), was

established in 2008, to serve as the key channel for dialogue between civil society, the

company and the public authorities and brings together three representatives from the

private sector, three representatives of Government institutions, and nine representatives

from civil society. This form of council served as a basis of collaborative dialogue and helped

the company build on the needs of the community.

In 2010, a public opinion poll conducted by IBOPE indicated that 91% of the population in

the municipality viewed the installation of Alcoa’s new bauxite mine as a positive way.

Alcoa’s approach to the Juruti project motivated Conservation International to say, “Alcoa is

raising the bar quite high and is creating hopefully a new model of how mining projects can

be established in Amazonia without creating new waves of deforestation in the region.”

Exame business magazine in November, 2010, recognized Alcoa, as Brazil’s Most

Sustainable Company, primarily for its initiatives related to the Juruti Bauxite Mine.

Rio Tinto developed had in 2003 set

an internal water standard for

setting out minimum expectations

for water management to be

unde r t aken a t each o f i t s

operations. Rio Tinto has used a

“catchment approach” to water

management, which encompasses

all water resources in the region

surrounding the area of operation.

Argyle Diamond Mine is the world’s

l a rges t s ing le p roduce r o f

G. Water Management - Argyle Diamond mine, Rio Tinto, Australia

0

500000

1000000

1500000

2000000

2500000

3000000

3500000

4000000

2005 2006 2007 2008 2009 2010 2011

Figure 24: Lake Argyle Water Consumption

Water consumption (kiloliters)

Source: International Council on Mining and Minerals Report on Water Management in mining dated May 2012


diamonds, producing approximately 30 million carats each year – one-fifth of the world’s

natural diamond production

The mine had a consumption of more than 3,500 megalitres from Lake Argyle to run its

operations in 2005. The target was set to reduce the use to zero over period of time. The

processing plant at the site was the biggest user of water, where water is used to wash and

separate the diamonds. Earlier water from the process was being discharged into the

environment, however since then the water is now been captured and recycled back

through the processing plant, achieving a recovery rate of 40% in recycling. Water seepage

from tailings is also captured and recycled for use in the process. Dewatering of the

underground mine and from the surface pit operation provides additional water that is

collected and stored in the two dams for drinking and operational use.

By introducing these changes to water usage in the mine, Argyle has achieved a 95% drop

in water taken from Lake Argyle since 2005, and by 2009 the use of water from the lake

was reduced to 300 megalitres.

Mining Industry - Key Challenges

04

• Regulatory factors:

Mining in India suffers from lack of co-ordination between different Center and

State Governments. Among various solutions proposed is the formation of a

single-window system with participation of all Ministries / Agencies to get

things moving and boost investor confidence.

The industry is also characterized by lack of transparency in decision-making

resulting in delays in approvals, extensions, clearances, etc. Common

examples affecting the Mining industry include uncertainty in getting the next

Mining Industry- Key Challenges 04


stage of mining concession (RP to PL or PL to ML) or extension of mining concession in a

time-bound manner. Similarly, lack of transparency and flawed process in allotment of

mining blocks opened the full Coal mining sector to an unprecedented judiciary overhaul

and cancellation of multiple coal blocks previously allotted by the Government. These

developments completely affected these Mining projects and associated downstream

projects in the core industries (e.g. Power, Cement, Steel, etc).

Inspite of having robust legal framework, absence of a strong body to oversee meant large-

scale illegal mining causing environmental imbalance forcing the Supreme Court to clamp

down mining completely in Karnataka and Goa. Lackadaisical approach in law enforcement

induced decision-making paralysis in parts/regions of the government machinery. It is

important to put in place a time-bound place, a time-bound plan to penalize errant miners,

monitor mining closely.

The industry has earned a bad reputation for sharing gains of Mining inadequately with the

local community and PAPs leading to difficulties in land acquisition. Unclear terms and

procedures for rehabilitation of PAPs, also pose a hindrance in getting clearances for

acquisition of land for mining projects. Further, land acquisition has been bottleneck

instances involving Forest Land (under purview of MoEF) due to inconsistent application of

Forest Laws.

Mining has resulted in environment violations viz., encroachment of forest land,

disappearance of flora, fauna and green-belts, violation of the annual permissible mining

quantity, etc.

The industry needs to rectify and address the environment and sustainablity issue by

adopting a balanced approach to Mining while also protecting the needs of forests,

environment, and ecology. Implementation of the SDF, first proposed in NMP 2008 and

subsequently provided for in the now lapsed Draft MMDR 2011 Bill, would help the industry

significantly in striking ecological balance.

• Negligence in enforcement of laws

• Community involvement and land acquisition

• Environment and Sustainability



• Under-developed evacuation infrastructure

• Insufficient Geological and Exploration Expenditure

Majority of India’s mineral deposits are located in Eastern and Central India.

Construction of railways and roads connecting these regions to consumption centers or

augmentation of Port infrastructure has been stuck for years because of insufficient

investments, delays in approvals and domestic insurgencies, etc. The Government

needs to invest in evacuation infrastructure to ensure optimum utilization of its mineral

wealth and reduce dependence on non-critical imports.

17India has lot of Mineral Resources, but accounts for only 0.5% of the global

exploration spend (compared to 19% and 12% by Canada and Australia respectively).

Also, exploration spend per square km in India is one of the lowest among the major

mining economies and exploration is mostly restricted to a depth of 50 to 100 metre

vs. as deep as 300 metre in countries such as Australia, South Africa and Canada. This

has acted as a deterrent for potential investors/ mining companies seen by way of

absence of large-scale involvement of Junior Exploration companies. Resultantly, little

of India’s vast mineral resources have been converted into mineral reserves.

To encourage Geological and Exploration spend, some of the best practices seen in

exploration focused countries like Australia, Canada need to be studied and

implemented in India (e.g. Flow through Shares as a financing tool for Exploration,

Mining rights seen as property rights and hence easily transferable, etc).

17 Source - Metals Economic Group website and 'Mining India: Sustainability for Growth, Ernst & Young'


A flow-through share (FTS) is a share, or the right to buy a share, of the stock of a mineral

resource company where tax deductions "flow through" from the company to the investor. A

flow-through share is issued under a written agreement between a corporation and an

individual. Under the agreement, the individual agrees to pay for the shares, and the

corporation agrees to transfer certain mining expenditures to the individual. Flow-through

shares were originally introduced to address an exploration financing inequity which arose

between major and junior exploration companies. Flow-through share investors can deduct

their investments from otherwise taxable income. Due to this feature – FTS have helped

funding exploration activities in Canada

The mining sector in India hasn’t reinvented itself in terms of technology. Availability and use

of high technology equipment is still below potential. According to a study, Coal India, the

largest Coal miner in the world produces 1,100 tonnes of Coal per employee annually. The

same metric is 36,700 tonnes for US’s Peabody Energy and 12,700 tonnes for China’s 18

Shenhua Energy . Inadequacy of investments in R&D has been a key reason for the

technology gap. Adoption of world class technology, equipment with latest emission norms

will result in numerous benefits like increased productivity, higher safety standards and

sustainable mining practices.

India lacks skilled human capital in mining as demand for engineers, diploma holders and

skilled/semi-skilled labour is expected to create shortfall equivalent to half the supply by Year

2025. To prevent this, significant investment in enhancing the human capital pool would be

required.

• Shortage of Technology and Human Capital

18 Source: PWC Report (2013)


• Insufficient Foreign investment in Mining

• Funding issues

The industry has been unable to benefit from foreign investment allowed under the

100% FDI automatic route. Part of the problem lies in the difficulties / failures

encountered by early foreign entrants (viz., Posco, Vale, Arcelor Mittal, etc) which

sought to invest in the Exploitation stage of the Mining value chain.

To win back the confidence of foreign investors, the domestic industry needs to

communicate the investment attractiveness of all components of the value chain

(including Geo-surveys, Exploration, Mining services, End-use processing) which can

benefit from foreign technology, skills and expertise through JVs, technology transfer,

etc.

The mining industry is capex intensive with high lead times. Resulting in high interest

costs. Further, regulatory hurdles hurt prospects of mining companies & this reflects in

fall in bank borrowings. There is thus need for financial support from banks/financial

institutions/ government agencies which would offer soft loans to mining companies,

manufacturers of mining equipment, contractors etc. Also, raising funds for exploration

activities in India is difficult as there are very few options available to raise requisite

funds for risky ventures.

Social Equity Model of Development– Sustainable growth in Mining

05

The long term model of sustainable development encompasses measures and

platform to build a cohesive and synergetic structure bringing together various

stakeholders in the value chain.

The Social Equity Model follows an integrated approach to development

involving the private developer, community, NGO's, Governmental

organizations, Financier and Knowledge Bank in formation of SPVs during

exploration or mining processes. The model is based on a cooperative

approach to development. Such partnerships provide a platform for fruitful

collaborative partnerships, and also create a strong knowledge base that

pushes sustained development and ensures social equity in the growth

strategies. Partnerships involving Govt./Pvt Sector/ NGOs can assist in giving a

larger/ global perspective to local problems

This social equity approach aims to holistically include the local community as

a partner, and is an enabler of development linkages with the rural and

semiurban communities. With inclusive development as an objective the

model takes into account the objectives of all the stakeholders involved in the

project.

Under this model, a special purpose vehicle is formed with equity from a

promoter, private investors and social equity from the local community in the

form of land allocation and local support. Government agencies and NGOs

provide the necessary support with respect to fiscal concessions and

Social Equity Model of Development– Sustainable growth in Mining05



facilitating the formation of synergetic partnerships between the local communities and

promoters of the project. The management of the project is by the promoter and the

involvement of local community also ensures sustainability of the project due to creation

of employment and added revenue for the community. This is a self sustaining

cooperative model of development where the local community involvement leads to the

creation of social equity.

The figure below gives the synergetic and transactional relationships between various

stakeholders in the process.

• Knowledge Based Partnership

• Sustainable Practices

• Facilitators

• Synergetic Partnerships

• Environmental protection

• Preserving heritage and culture

• Employment

• Livelihood

• Collaborative approach

• Preserving heritage and culture

• Sustainable best practice

• Sustainable Model Financing

• Responsible Lending practice

• Platform for Voice

• Knowledge based inputs

• Cooperative model of

Development

• Institutional Mechanism

• Showcase / replication of

Established model.

• Platform for future knowledge

initiatives

• Advisory

• Knowledge

Partnership

• Risk Capital

• Private Sector Efficiency

• Support and inputs

• Responsible Development

• Sustainable practices

• Policy Regulations

• Govt Facilitation

• Fiscal Concessions / Social

Equity investment.

• Policy Research

• Good Governance practices

• Social Equity approach

• Structuring, Social Equity based

inclusive devt.

• Advisory

• PPP implementation

• Return on Capital

• Profit• Contribute Resources in form

or Land and Labor

• Structured Participation in

management (cooperatives /

producer

Debt / Equity

Interest/Profit

Knowledge Bank

Government/Inter government

organization

Entrepreneur /

Company

Financiers / Investors

NGO(s)

Figure 25: The Social Equity Model



Eco System Approach

1. Knowledge Bank – Private Player – Mining SPV

2. Knowledge Bank – Government – Mining SPV

3. Knowledge Bank – NGO- Community – Mining SPV

Collaborative Community Structures: How They Help Foster Inclusive Growth

Developmental Partnerships

The model follows an eco system approach where sustainability of the entire eco system is

built upon smaller ecosystems which contribute to the synergetic alignment of the entire

chain. Various sub ecosystems and their inter linkages are explained below

The private player brings risk capital for developing resources which along with efficiency in

operation is expected to provide adequate return on capital in terms of profitability and

positive payback from investments. The Knowledge Bank provides the private players,

knowledge advisory in terms of various sustainable development practices and good

governance practices which promote and facilitate responsible mining operations being

carried out for various stakeholders in the Eco system.

The Government forms policies and regulations within which mining companies operate.

These policies form the broad framework of operation and adherence to the same is

required to carry out mining activities by the SPV. The Knowledge Bank through its policy

focused research provides inputs with regards to various sustainable best practice and

good governance which can be adopted at the policy level to bring about a change in the

current mining activities enabling a comprehensive socio economic development.

The Knowledge Bank using its Social equity approach for development brings Communities

and NGOs within the Value chain of development thereby ensuring the sustenance of eco

systems. The knowledge bank through its cooperative model of development provides

inputs to NGOs and Communities too. Building on this collaborative community model of

development, the community provides inputs to the Mining SPV in terms of land and labor

in return for structured participation in management and adoption of sustainable

development practices for preservation of heritage and culture.

• Multi Stakeholder response to local challenges as an effective tool for sustainability.

• Capacity Building and cooperative structures 'enable' communities to manage and

solve their issues themselves


• Such partnerships provide a platform for fruitful collaborative partnerships, and also

create a strong knowledge base that pushes skill development and ensures social

equity in the growth strategies. Partnerships with Govt./Pvt Sector/ NGOs assist in

giving a larger/ global perspective to local problems

• Policy Framework: Institutional innovation to consolidate structures that guide

communities and entrepreneurs

• Facilitates an equal voice for all stakeholders, thereby observing their interests and

making mining activities sustainable in the long run.

• ‘Real’ Ownership: Align aspirations and foster ownership/responsibility for common

purpose/goals

• Provide platforms, skills and opportunities for communication

Stakeholder Alignment

Way Forward

06

Sustainability has always been at the forefront of the Mining Industry. It has

major implications on overall development of rural communities including

upliftment through involvement in mining activities. Maintaining this socio-

economic balance has therefore attained a monumental position for equitable

growth of an economy. The three sustainability facets shaping sustainable

mining practices include – Environment, Social and Economic aspects (the

triple bottom line). The following points highlight areas critical to thrust the

industry an its growth trajectory.

Way Forward06


Mining impacts the environment as well as the socio-economic set-up. Therefore, minimizing the adverse impacts and optimizing the benefits from mining to the community becomes critical for creation of Sustainable Development Framework (SDF)


• Adopting an integrated approach for development in Mining– ‘The Social Equity Model’

• Enhancing Policy/Regulatory framework

The Indian mining industry has been characterized by a moderately cohesive and

synergetic structure that lacks the required environment. This is where the Social Equity

Model becomes vital for long term sustainability. The cooperative approach towards

development could encourage social equity in growth strategies promote strategic

collaborations with infrastructure players and investors.

Given the untapped potential of mining in the country, current mining policies must be

aligned to attract foreign investments and operations. It has been observed, that State

governments are usually inclined to reserve potential areas to Public Sector Units in 19

grants of mineral concessions . These reservations prevent private sector from entering

these areas and conducting exploration activities. It is critical that policies focus on

promoting private sector involvement and Improving rail and port services through modes

of Public Private Partnerships (PPPs).

Figure 26: Sustainable Development Facets


19 Source: Development of the Indian Mining Industry–Way Forward, FICCI Mines and Minerals Division. October 2013


• Boost Mineral exploration and efficiency of Mining activities

• Incentivize investments in Mining and rationalization of Taxes

20With an estimation of 5.71 lakh square kilometers of Obvious Geological Potential area in

India, the government must focus on allocating funds towards exploration and

development activities. Despite this immense potential India spends only a fraction of its

GDP on exploration and does not exploit its innate potential. This is clearly indicative of the

insufficient implementation of GSI recommendations and lack of policies supporting

mandatory exploration for mines and incentivizing green field exploration. Attracting global

investments in exploration could provide the required impetus as current players lack the

required technology, skill set, efficiency and operational agility to exploit mineral exploration

to its maximum.

The Indian Mining sector is undoubtedly one on the highest taxed sectors in the world with

its effective tax nearing 45% vis-a-vis other countries like Australia (39%), Canada (35%), 21China (32%) and Russia (35%) . The current tax policies extort value rather than attract

investments in the mining sector. As per the current draft, the MMDR Bill 2011 levies

additional taxes and duties leading to the effective tax nearing 60%. Which would further

burden the sector and inhibit its growth. There is hence a pressing need for policy makers

to adopt tax reforms and introduce incentives/concessions that India a competitive position

in the global mining space.

20 Source: http://mines.nic.in/writereaddata%5CContentlinks%5C3e370e6d5bf34a11b7badb248ed812e3.pdf21 Source: http://www.ficci.com/spdocument/20317/Mining-Industry.pdf


• Encourage transparency and regulatory certainty

• Single Window/Provisions for speedy clearances

• Benefits sharing can trigger inclusive growth

Despite having 100% FDI, the mining industry is yet to receive significant capital

inflows from foreign players. Even in terms of investment environment, India is ranked

low under the ‘attractiveness of Government mining policies’ criterion. Clearly, policy

makers need to focus on providing an enabling environment that encourages

transparency. To encourage potential investors additionally, there is a need to clearly

define regulations around new concessions and mining operations. Although the rising

demand for metals globally tends to drive investor interests, the uncertainty aspect

draws them away from investing. Therefore it is critical for the Government to realize

the importance of regulation certainty to investments in the sector.

Currently, mineral policies of each state in India diverge from each other and vary in

terms of grants of mineral concessions. The provisions under the Forest (Conservation)

Act 1980 need to be reviewed to encourage detailed prospecting and exploration for

mineral investigation, Further prospecting activities should be excused from forest

clearances as long as no degradation is being caused by the activity. Single window

clearances should also be introduced to expedite approval processes and increase

efficiency through reduced costs and time involved.

A very critical aspect of

s u s t a i n a b l e m i n i n g

encompasses the need to

share mining benefits with the

community. For long term

sustainability, there is an

u r g i n g n e e d f o r t h e

government to propose an

economic model that aligns

stakeholders’ expectations

with sustainable profit sharing

ratios. Sharing profits with the

local communities tends to

facilitate benefits to trickle

down to the grassroot level. Mining companies should also be responsible for

augmenting infrastructure and basic amenities in these regions.

The Federation of Indian Mineral Industries (FIMI), which came into existence with a small

membership of about 40 federating associations and individual units, is now a 350-member

body. FIMI envelopes in its fold mining, mineral processing, metal making, cement and

other mineral-derived industries as well as granite, stone, marble and slate industries —

private, joint and public sectors — of the country. It represents the entire non-fuel mining

and mineral processing activities of the nation. FIMI's main objective is to establish a

vibrant, environmentally benign mineral industry (explorative, extractive and processing

activities related to minerals) that meets the mineral needs of the nation from the existing

resource endowment, import the mineral and metals that are scarce or absent, and export

the surplus minerals and metals that have an external market without prejudice to

domestic needs. FIMI is persuading official implementing agencies to bring out the

necessary changes in procedures to avoid delays in order to harmonize the policy and

practice in the mining industry.

YES BANK, India's fourth largest private sector Bank, is the outcome of the professional &

entrepreneurial commitment of its Founder, Rana Kapoor and his top management team,

to establish a high quality, customer centric, service driven, private Indian Bank catering to

the future businesses of India. YES BANK has adopted international best practices, the

highest standards of service quality and operational excellence, and offers comprehensive

banking and financial solutions to all its valued customers.

YES BANK has a knowledge driven approach to banking, and a superior customer

experience for its retail, corporate and emerging corporate banking clients. YES BANK is

steadily evolving as the Professionals' Bank of India with the vision of “Building the Best

Quality Bank of the World in India” by 2020.

mining report inside book - yes bank · this report is the publication of yes bank limited (“yes...

Documents