IMPACT OF THE RECENT NOTIFICATION BY MINISTRY OF MINES FIXING THE TLV OF MONAZITE IN TOTAL HEAVY MINERALS AS 0.0% IN BEACH SAND MINERALS DEPOSITS.

IMPACT OF THE RECENT NOTIFICATION BY MINISTRY OF MINES FIXING THE TLV OF MONAZITE IN TOTAL HEAVY MINERALS AS 0.0% IN BEACH SAND MINERALS DEPOSITS.

As per this notification, it prima facie appears that the private sector who are presently having mining leases for beach sand minerals will have to relinquish their rightful mining leases, even though nothing specific is mentioned in the notifications regarding the existing mining leases. It is amply clear that it will not be possible to get any fresh mining lease for beach sand minerals by any private player.

History of Beach Sand Minerals Industry in India:

India is endowed with a coastline of over 6000 km and hosts some of the largest heavy  mineral placer deposits along the coastal stretches as well as  a few inland, mostly in the states of Tamilnadu, Andhra Pradesh, Orissa, Kerala and Maharashtra. These beach placers contain a multi mineral suite of heavy minerals comprising Ilmenite, Garnet, Leucoxene, Rutile, Zircon, Sillimanite  and Monazite. Most of these minerals occur together and their individual contents  vary from deposit to deposit depending on various factors associated with their formation by  natural geological processes. The major mineral in most of these Beach sand mineral deposits is ilmenite.

India contains significant reserves of Ilmenite, Garnet and Monazite containing  Rare earths ( Table 1), but these resources remain grossly underutilized with the production to reserve ratio ( PRR) being a meagre 0.0018 % when  compared to global PRR of 0.01% . India is stuck in this paradox and must leverage its plentiful resources to transform into a major global producer .

 

S.No.	Mineral	World Reserves Million Tonnes**	Reserves in India Million Tonnes*	Percentage share of global reserves
1	Ilmenite	1400	593	35
2	Garnet	420	168	40
3	Sillimanite	NA	226	NA
4	Zircon	243	34	14
5	Rutile	310	31	10
6	Monazite	17	12	71

Table 1     ( *India figures are based on  AMD,. Hyderabad report . **World figures are based on USGS report for 2013)

Beach sand minerals and their derivatives find diverse applications in day to day use as well as strategic and high tech applications. The key impediment for the growth of this sector has been the constraints and challenges faced due to current mining policies and rules governing the Beach sand minerals. With proper encouragement and recognition from the Government for the BSM sector, this could be a mega opportunity for a successful “Mine in India “ and “Make In India” programme.

BSM Industry  scenario

The beach sand minerals mining activity in India is over a century old and commenced in 1908 when the beach sand containing monazite was mined and taken to European countries from the erstwhile Travancore state. After independence, the BSM sector was brought under the controlled regime due to the presence of monazite. It is pertinent to note that until 1998, this sector was restricted only to Public sector companies   and there was no substantial development in the production capacity of these beach sand minerals and no significant value addition facilities.  Recognising the untapped potential of the Beach Sand Minerals sector, the Department of Atomic Energy (DAE) announced the Policy on exploitation of Beach Sand Minerals in 1998 and opened up this sector to wholly Indian owned companies which brought in significant investments by private sector companies. Since entry of the private sector, the production of beach sand minerals has substantially increased and the export value has increased from Rs. 35 crores in 1998 to over Rs 5000 crores in 2016. The private sector producers have spearheaded   not only mineral production but   also invested in the value chain.

 

The current estimated production and demand figures for the minerals and value-added products of ilmenite (Table 2) amplify the incongruity in domestic production despite ample resource potential.

 

Mineral   /product		Indian production (lakh tonnes)		Indian Demand (lakh tonnes)		World production (lakh tonnes)		World demand (lakh tonnes)		Average Growth rate / year	India Scenario
Garnet		7		0.15		12		12.5		5-8%	Exporter
Ilmenite		11		1		175		190		3-5%	Exporter
Zircon		0.4		0.8		15.5		15.5		3-5%	Importer
Rutile		0.25		0.45		9.75		9.75		5-8%	Importer
TiO2pigment		0.50		2.20		72.0		70.0		3-5%	Importer
Rare Earths		Negligible		RE products imported		1.7		1.6		5-10%	Importer

Table 2  (* These figures are estimated based on the production figures available with the producers worldwide and port statistics on import and export of the minerals and their products when it was at the peak).

It may be worth mentioning that if only government companies will be exploiting the beach sand minerals in India in future as contemplated in the notifications, it is definite that the beach sand mineral deposits will always remain under the earth for generations and India will have to totally depend on import of beach sand minerals and their value added products as it can be seen from the scale of operation of the public sector units for the last more than 50 years. It is a pity that the present “Make in India” government is driving this sector for import of our requirements ignoring  all the financial, technical and managerial capabilities which are locally available.

The fall out of the notifications will be as follows:

1. The value addition units set up by private miners to value add the ilmenite has to be either closed down or import ilmenite which is their feed material. This has to be at an extra cost and the value-added product produced by importing the ilmenite will make their product uncompetitive to the titanium dioxide product imported from China. This is due to the bad experience faced by VV Titanium Private Limited during the last few years when ilmenite production by private miners were suspended in Tamilnadu. Indian Rare Earths Limited (IRE) was not able to supply even one grain of the mineral and instead they were interested in export of ilmenite at the cost of the local industry. It is also a pity that IRE does not have any value addition facility for any of these minerals nor have any intention to set up any. Hence this move will definitely help China.
2. It is a proud moment to state that Indian private beach sand mineral producers had made it possible to make India the second largest producer and exporter of the mineral garnet in the world. However, by this notification, it will be totally demolished. It is also a pity that IRE, instead of producing garnet, are selling the garnet concentrate (as they are unable to produce marketable grade) to outside companies to produce garnet.
3. All the private beach sand mineral producers in India will look for investment abroad where the concentration of the heavy minerals are much less than what is available in India as they have the technicality to produce these minerals at lower cost, which will result in capital outflow for the country.
4. India will have to import the requirement of all the beach sand minerals and their value added products which will have a double effect of reduction in export of around Rs. 5000 crores and increase of imports to the tune of around Rs. 3000 crore minimum at the present level and will exponentially increase when the industrial and economic activity of India improves.
5. The occurrence of the beach sand minerals is unique and there is the possibility of inhabitation on these deposits in due coarse of time if it is timely exploited. Over the years, there is a possibility of these deposits becoming not mineable due to inhabitation.
6. Almost more than 50,000 persons who are directly employed by the private mining companies will become jobless in addition to another 1,00,000 indirect employees facing destruction.
7. The efficient and trained manpower in the BSM industry will become obsolete.

 

WHO IS GOING TO BENEFIT BY THESE NOTIFICATIONS:

1. Countries like China and Australia who are competitors for the beach sand mineral products and value added products.
2. The self declared activists and environmentalists who are backed by agencies who are determined to destruct the technological, financial and economical development of our nation.