Measures for revival of heavy mineral industry in India and increase the forex in-flows

Web Admin

Feb 08 2022

a) Minerals namely garnet, ilmenite, zircon, rutile, leucoxene, silimanite,
Monazite, etc are the minerals collectively called as heavy mineral or
beach minerals.
b) India is blessed with 35% of entire world’s reserve of many of these
minerals and world’s 2nd or 3rd richest reserve in the entire world.
These minerals are widely found in coastal districts of Kerala, Tamil
Nadu, AndraPradesh and Orissa.
c) From independence to 1998, only a Central Government company
named IREL (Indian Rare Earths Ltd) was producing these minerals
exclusively.
d) In the year 1998, the then Prime Minster A.B.Vajpayee liberalized this
sector and encourage private participation of these minerals (except
monazite).
e) Private players especially emerged in Tamil nadu and Andra Pradesh,
positioned the industry to be ranked No.1 in the world’s production
ranking.
f) Due to in-fighting, and some corrupt bureacrats, baseless allegations
was floated on this industry and invited various measures against this
industry, effectively killing the industry altogether.

Step 1 : Revoke TLV (threshold limit value) back to 0.75% monazite in
the rule Atomic Mineral Concession Rule (AMCR) 2016 which was
amended by Ministry of Mines vide GSR 134(E) dated 20.02.2019

Step 2 : Call back the lease cancellation efforts made by Ministry of
Mines vide their letter No. 1/1/2019-M.VI dated 01.03.2019
Competent authority (for step 1&2) : Ministry of Mines

Step 3 : Revoke the canalization of these minerals through Indian rare
earths Ltd (IREL) by DGFT vide Notification No. 26/2015-2020 dated
21.08.2018.

Competent Authority : DGFT, Ministry of Commerce

Expected Forex inflow : 4500 crores equivalent in US Dollars
immediately and 15% growth each year.

savings in FOREX outflow : 3000 crores worth of Tio2 pigment
import is happening each year which can
be saved.

Expected new employment : 75,000 employees immediately and
further when expansion happens.

Since the liberalization of the sector by the then Prime Minister A.B.Vajpayee this industry grew from mere Rs.35 Crores per year to 4500 crores.

Subsequently DGFT vide Notification No. 26/2015-2020 dated 21.08.2018
canalized the export of beach minerals through IREL and prevented the
private players direct export. The canalization guidelines was so one sided
except IREL no other parties can export. So at present the export value
decreased from Rs.4500 crore to Rs.1000 Crore per year.

Meantime Ministry of Mines amended the threshold value vide GSR
134(E) dated 20.02.2019. So there is no possibility to grant fresh mining
leases to private parties.

Ministry of Mines vide letter No. 1/1/2019-M.VI dated 01.03.2019
directed all the state governments to cancel the private mining leases
granted to private parties for beach minerals.

This resulted in following drastic outcomes :
1) employment loss of more than one lakh employees.
2) The replenishable beach placer deposits was carried away by ocean
currents to neighbouring countries like Sri Lanka since it is not mined
in time in India.
3) India lost the dominance in industry which was achieved over a gradual
growth in the past 30 years. The entire beach mineral market and its
dominance went to developed countries and China.
4) Premature termination of the mining leases make fear on the minds of
foreign investors above Indian government.
5) The skilled labours in beach mineral industry as well as industry
owners migrates to the nearby countries and started developing the
industry on other countries. As a result, India will lose the technical
dominance on this industry too
6) In addition to Rs.4500 Crore foreign exchange loss, 10% export duty
loss to the Central Government plus, 28% GST and 3% royalty to the
State Government.
7) Apart from 75000 employees in this industry, employment by way of
ancillary industries approximate 50000 employees.
8) Though India has 1/3rd of the reserve, due to the above action, Indian
Titanium producers import Ilmenite (which rightfully belongs to Indian
shores) from Srilanka as well as from other countries. Thus, foreign
exchange outgo loss to our nation.
9) The newly developed Indian Titanium Industries are struggling due to the heavy import cost of Ilmenite, through plenty of Ilmenite available in India, but could not use it. So India is losing foreign exchange of Rs.3000 Crores per year by way of Titanium Ti Oxide import from overseas countries.

Bringing back this sector, effectively with the three steps mentioned above
will go a long way not only on country’s economy but also providing local
employment to rain show coastal areas of Tamil Nadu and Andra Pradesh.

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