India: Govt announces establishment of Project Monitoring Unit to oversee mining auctions

The Federation of Indian Mineral Industries (FIMI) conducted its 57th Annual General Meeting on 18 September 2024 in New Delhi. VL Kantha Rao, Secretary, Ministry of Mines, was the Chief Guest at the event, which congregated leading stakeholders to explore growth avenues for India's mining industry. Key takeaways from the event follow:

India's economy witnessed a growth of 8.2% in FY'24 amid robust development in infrastructure, manufacturing, service, and other sectors. During the same year, the mining and quarrying sector grew 7.1% y-o-y. As a result of strong economic fundamentals, it is expected that the country will become the world's third-largest economy by 2027.

Shantesh Gureddi, President of FIMI and Managing Director of Sri Kumaraswamy Mineral Exports Pvt. Ltd., discussed several key challenges being faced by the industry. Gureddi emphasised the need for a secure and sustained supply of raw materials for the growth and stability of the sector and highlighted the importance of captive mines in consistently supplying operational plants with resources.

In collaboration with NITI Aayog and the Ministry of Mines, Gureddi proposed a pivotal policy shift. He advocated for an additional 20 years of extension for mining leases that are set to expire in March 2030. This proposal aligns with Schedule V of the Mines and Minerals (Development and Regulation) Act, which currently applies to government-owned companies and captive mining operations. If implemented, this policy could prevent supply chain disruptions, maintain operational continuity, and support long-term industrial growth.

V. L. Kantha Rao lauded the achievements of companies excelling in the sector. The Sustainable Mining Award was presented to NMDC's Bailadila operations, while Vedanta's Sesa Goa unit received the Innovation Award. These accolades reflect the sector's focus on sustainability and innovation, both of which are key to the future of mining in India.

During his speech, Rao discussed the current state and prospects of the industry. Highlighting the mining sector's importance to the national economy, he noted that it contributes 2% to India's GDP. He also encouraged exploration agencies to actively seek licences and engage in new projects to help drive the sector's growth.

One of the notable initiatives announced was the establishment of a Project Monitoring Unit (PMU) to oversee mining auctions. This unit will play a critical role in ensuring efficient and transparent processes in the allocation of mining blocks. Furthermore, the ministry has identified 20 areas for offshore mining exploration- 10 along the east coast of India (ECI) and 10 along the west coast of India (WCI). These untapped resources could significantly boost India's mineral production in the coming years.

The ministry, in collaboration with FIMI, is actively involved in creating a State Mining Index (SMI). This index aims to monitor best practices and performance metrics within state mining industries, to enhance efficiency, accountability, and innovation in the sector.