MAKE IN INDIA: POSSIBILITIES AND CHALLENGES IN BEACH SAND MINERALS SECTOR

By SWAMYDAS. B.Sc., B.Tech (IIT)., M.S. (USA).,

Chief Adviser and Technical Expert- Beach Minerals Producers’ Association

1. INTRODUCTION

Beach Sand Minerals (BSM) generally consists of ilmenite, rutile, zircon, garnet, monazite, leucoxene and sillimanite coexisting with each other. Most of these minerals occur together, their individual contents varying from deposit to deposit.  The major mineral in most of these deposits is ilmenite. The BSM and their derivatives find applications in day to day use as well as strategic and high tech applications. The exploitation of BSM in India is not in consonance with the reserves. The Production to Reserve Ratio (PRR) was less than 0.001% in the last decade of the last century and improved to 0.0018 during the year 2015 due to the opening of this sector to wholly Indian owned companies. It is unfortunate that this BSM sector does not receive the desired attention of the central and state governments due to the following facts:

1. The revenue to the governments is negligible compared to those from oil, coal, iron ore and limestone.
2. The strategic importance of these minerals is not explicitly visible.
3. The huge employment generation potential is not properly recognized.
4. The downstream industries possibilities are not recognized.

If proper recognition and encouragement is given by the central and state governments for BSM sector, it will turn out to be a successful “MAKE IN INDIA” programme. This paper presents in detail the necessity to concentrate on the BSM sector in the interest of the development of our nation.

2. BSM RESERVES

Our country is endowed with 35% of the world reserves of Beach Sand Minerals. The exploration in our country had covered only around 2000 km of our coastal stretch out of the country’s coastline of around 6000 km. If the balance coastline is also explored, our country’s share of the BSM will be enormous. The detailed world and Indian reserves estimate is given below:

3. HISTORY OF BSM SECTOR IN INDIA

The beach sand mining in India is more than one century old. The first mining was started in 1908 when the beach sand containing monazite was mined and taken to European countries from the erstwhile Travancore state. Subsequently, processing facilities were set up to separate the minerals like monazite, ilmenite etc. in Manavalakurichi presently in Tamilnadu and Chavara, Kerala. Till 1965, only private players and some semi-government companies were in the field and the production and export was around 3.00 lakh tpa of ilmenite. During 1950, government of India had set up a public sector company, Indian Rare Earths Ltd., (IREL) under Department of Atomic Energy (DAE), to process the monazite being produced in the country to produce rare earth compounds and thorium concentrate. Due to the vagaries in the world market for ilmenite, the operations of the mineral plants used to be suspended when there was no market for ilmenite. This had adversely affected the operations of IREL monazite processing facility for want of feed material. To overcome the shortage of monazite feed material, the government decided to take over all the shut down beach sand operations and accordingly, the assets were taken over by IREL along with the mineral concessions and after suitable modifications, the plants started operations from 1969 and started production of ilmenite, rutile, zircon, monazite, garnet and leucoxene.

After taking over of the private industries in 1965 by IREL, IREL and Kerala Minerals and Metals Limited (KMML), a Kerala government enterprise were the only organizations in the field of BSM mining. Till 1998, these two companies were producing only around 4.00 lakh tonnes per annum of these minerals. This amounted to a growth of only around 30% from 1965 to 1998 (a period of 33 years). Recognising the potential for titanium, zirconium and rare earth minerals in the world, the GOI had decided to open this sector to private companies in 1998, since the production to reserve ratio was less than 0.001% in 1998 and the government was not in a position to invest in BSM mining.  The BSM sector was opened to private sector based on the National Mineral Policy 1991 and the recommendation by DAE after elaborate discussions with stakeholders like private garnet mining companies, CAPEXIL, representatives of the concerned departments in state and central governments with the sole intention of improving the production to reserve ratio. The primary intention of the Beach Sand Minerals Policy, 1998 and the subsequent deliberations in 2006 on the BSM sector privatisation were to bring in wholly owned Indian companies in the BSM production and foreign investment for value addition. The public sector players are in the field for almost half a century with no substantial increase in the exploitation of the BSM reserves. In the “Policy on Exploitation of Beach Sand Minerals” by Department of Atomic Energy in 1998, it is specified that “Considering the growing demand for these minerals and/or their value added products in the domestic as well as international markets and the potential available in the country, setting up of new plants for exploitation of the deposits in fresh locations would be in the interest of the country. However, this is highly capital intensive and it may not be possible for only the PSUs (both Central and State owned) operating in this field to set up the new plants on their own. It is therefore, necessary to allow private sector to set up such plants within the framework of some broad guidelines”. It is relevant to note that, private companies only can bring in latest technologies, available in India and elsewhere in the world and also the required capital for expansion of this industry both for mining as well as for value addition. Though the policy came in 1998, it took almost another five years for the private sector to engage fully and start operations. After opening up of the industry to private sector for mining and production of all minerals other than monazite, the annual production BSM in India had gone up and the present PRR is 0.0018 amounting to 80% increase in the sector in twelve years.

BSM AND THEIR DERIVATIVES AND APPLICATIONS

1. ILMENITE: Ilmenite is an iron titanium oxide mineral with chemical composition of FeTiO₃. The products derived from ilmenite are mainly titanium dioxide pigment, titanium metal and titanium dioxide nanomaterials. Titanium dioxide pigment finds use in paints and coatings, plastics, paper, ink, fiber and as specialty chemical. Being a non-toxic and biologically inert material, TiO2 find use in a range of consumer applications such as foods, cosmetics and pharmaceuticals. Titanium metal finds application in aerospace, defense, consumer products and other industrial applications due to their high corrosion resistant properties. In addition many new applications are also emerging for the metal. Titanium nanomaterials finds wide spread applications in dye-sensitized solar cells, low-power markets to large scale applications and as an arsenic removal agent in water treatment facilities, cancer treatment and cement that absorbs pollution.
2. RUTILE: Rutile is also iron titanium oxide with a titanium dioxide content of around 95%. Rutile is used as an important constituent of welding flux. Rutile is also used as a feed material to produce TiO2 pigment.
3. ZIRCON: Zircon is zirconium silicate with a chemical formula ZrSiO4. Zircon finds applications as ceramics, foundry and investment casting, refractories, fused zirconia, zirconium chemicals and zirconium metal. Ceramic applications include the manufacture of floor and wall tiles, sanitary ware and table ware. Steel production and glass production are the main refractory sectors that consume zircon and zirconia based refractories. Fused zirconia finds use in refractories, abrasives and ceramic pigments. Zirconium chemical are used in gemstones, paper coatings, cosmetics, paint driers, antiperspirants, printing inks, paints and catalysts. Zirconium metal has application in chemical process industry as structural material in heat exchangers, reboilers, evaporators, reactor vessels, pumps, condensers, valves and piping. Another major use of zirconium metal is for making zircalloy tubes for holding the uranium pellets for nuclear plant feed.

4. GARNET: Garnet is iron aluminum silicate with the chemical formula Fe₃Al₂ (SiO₄)₃. Garnet is a good abrasive and as such it is used for sand blasting and water jet cutting. It is also used in filtration, for glass polishing and lapping.

5. SILLIMANITE: Sillimanite is aluminum silicate with the chemical formula Al₂SiO₅. Sillimanite is used as a refractory which are used in cement, ceramics, glass making, metal smelting, refinery and treatment, tar distillation, coal carbonization, chemical manufacture and iron foundries.
6. MONAZITE: Monazite is a phosphate of rare earths, thorium and uranium. Monazite contains around 67% rare earths elements, which is comparatively higher to other sources of rare earths available elsewhere in the world. By chemical processing of monazite, individual rare earth compounds and further value added products can be produced and they find applications in TV sets, cancer treatment drugs, camera lenses, battery electrodes, hydrogen storage, catalytic converters, coloured glass and steel production, super strong magnets, welding goggles, lasers, microphones, electric motors of hybrid automobiles, nuclear reactor control rods, fluorescent glass, shielding in nuclear reactors, fuel cells, sonar systems, commercial lighting, hard disk drives, transducers, signal amplification for fiber optic cables, high temperature super conductors, petrol refining, LED light bulbs and integrated circuit manufacturing. These rare earth elements exist in our everyday life being present in automobiles, bicycle, cosmetics, cell phones, solar panel, stationary materials, watches, wind turbines, aerospace, ornaments, tooth brush and paste, toilet seat, soap, clothing, trains, and supplementary tablets. Apart from rare earths, uranium and thorium will also be produced, while processing monazite, which are the present and future nuclear fuels.

5. PRESENT STATUS OF THE BSM SECTOR

The production and demand figures for the mineral products and value added product of ilmenite for the year 2015 is given below:

From the above figures, it can be seen that India can really improve its position in the world market as a prominent player in BSM minerals. India can become a dominant player in rare earths if proper exploitation of the mineral monazite is taken up in the country. At present, being a 95% producer of rare earth elements and REE based products in the world, China is imposing impracticable conditions and even denying supply to countries like Japan. If proper policies are brought in our country to produce and value add the monazite mineral, in addition to becoming the second largest supplier of rare earths to the world, strategic international relations can be built up.

It is pertinent to note that due to the imposition of impracticable conditions by the producing countries in the world and also due to the increasing prices of titanium, zirconium and rare earth products, efforts are on to find alternates for these products. Presently, all these are very much sought after commodities as they find wide utilization in everyday life. It is worth mentioning that technological development is moving on a very fast pace and whatever material is important today may not be required after a few years. The titanium, zirconium and rare earths, which are important materials today may not be relevant after fifty to hundred years. The rare earths came into prominence during the last two decades and before that RE was not considered important.  Hence it becomes necessary for India to step up the exploitation of the BSM mining to reach the international PRR of 0.01, as otherwise India will miss the chance and the BSM deposits may be buried under the earth forever without any utility.

6. POSSIBILITIES OF “MAKE IN INDIA” IN THE BSM SECTOR

The world wide PRR is around 0.01% and if this PRR is achieved in India, the life of the identified deposits will last for hundred years. The elements like titanium, zirconium, rare earths, thorium and uranium are strategic minerals and they occur in the BSM. Hence, in the national interest, we have to reap the benefits of these materials when they are in high demand as otherwise these materials may become redundant.

It is worth mentioning that even though IREL was the major player in this sector for the last fifty years, they do not have any substantial value addition facilities in place. IREL’s ilmenite value addition project in Orissa, zircon value addition project in Tamilnadu and the monazite value addition project in Kerala were closed down due to technical problems and mounting losses.

If the country plans to exploit the BSM deposits at a PRR of 0.01, which is prevalent in the world today and go for value addition of ilmenite, zircon and monazite, the country will benefit enormously. The likely production figures of the minerals by achieving the PRR of 0.01 is given below:

Note: The above figures are based on the recovery figures of 75% for ilmenite and 60% for other minerals from the mine to the production.

In the case of achieving the above figures of annual production and 100% value addition of ilmenite, zircon and monazite are implemented in the country, the nation will be benefitted to a great extent as indicated below:

India can meet a substantial quantum of TiO₂, zirconium chemicals and the rare earth elements required in the world and likely to become a strategic player in these fields. If the country proceeds in this direction, there will be additionally around 250 tonnes of uranium and also around 6000 tonnes of thorium oxalate per annum will be available  for the present and future nuclear fuel requirement of the country. This level of activity also will have the following financial and social benefits to the country.

1. Direct employment:           3,00,000 persons
2. Indirect employment : 5,00,000 persons
3. Total Capital employment : 1,21,000 crores.
4. Total Turn Over(annual):      90,700 crores
5. Revenue to the governments:     29,600 crores per annum

In addition, India will become a prominent player as the exporter of TiO2, rare earth products and zirconium chemicals.

7. CHALLENGES TO THE BSM SECTOR:

 MMDR Act Amendment, 2015: Recently a notification was gazette by the MOM bringing in minerals like garnet and sillimanite under the category of Atomic Minerals, even though, DAE had removed all the beach sand minerals other than monazite from the prescribed substances, required for atomic energy. This will definitely have a negative impact on the development of the BSM sector.

• The present central government is taking proactive action for the industrial development of the nation. Mining is one of the main sectors contributing to the nation’s economy. With an intention to boost mining sector, the GOI came with the MMDR Act Amendment, 2015, followed by the sector-wise rules for implementation. Prior to this amendment, there was only one Minerals Concession Rules. However, now separate rules are framed for different sectors and one of them is Atomic Minerals Concession Rules, 2016(AMCR), which is for the first time in the history of India. The following are the salient features of this new rule:

 1. The AMCR stipulates that if the monazite content in the Total Heavy Minerals (THM) is equal to or more than 0.75%, then the deposits will be reserved for the government companies and even existing mining leases can be cancelled and allotted to government companies

2. It may also be noted that for all atomic minerals other than BSM, the TLV is indicated as a percentage of deposit/ Ore where as for BSM it is a percentage in THM.

3. This AMCR itself was a new concept and no such rules were existing prior to the MMDR Act Amendment, 2015.

4. If the AMCR is implemented in the present form, almost all the existing private players will have to close down their operations, which will result in huge losses to them and loss of employment to about 50,000 persons in the backward areas of Tamilnadu and Andhra Pradesh. It will also take the production to reserve to a figure less than that prevalent before opening of the BSM industry to private sector. The entire BSM industry will perish

5. When the draft AMCR was published in April 2016, the concerns of the various stake holders like BSM operators, associations and the government of Tamilnadu, where maximum BSM operations are situated were represented to the Ministry of Mines.  However, none of these concerns were taken note of either by the ministry or other connected departments and on 04-07-2016, at Raipur, the MOM published the AMCR without much consideration of the concern of the stakeholders. During discussions on this in a subsequent session in the mining conclave purely for this purpose, MOM officials present informed that they are totally ignorant about the provisions of the rules and they have come out with the rules as drafted by DAE.

6. The DAE officials, as the author of these rules, must have been available for discussions with the stake holders. MOM officials were neither ready to listen to any of the suggestions made by the BSM producers, nor to organize a meeting with the different stakeholders. It may be noted that, no discussions were held with the stakeholders before finalizing the rules.

7. If these rules are implemented in the present form, the BSM sector may go back to a stage where it was two decades ago and private sector players will neither be interested nor can survive in this industry unless level playing field is provided to them to work.

8. There is not even an application form for mining lease in the AMCR as required in section 10 of the MMDR Act amendment 2015.

9. There are many contradictory clauses in the AMCR which was indicated to MOM at the draft stage itself and yet to be modified.

10. There are many ambiguities in the AMCR.

 7.4 A typical flow chart of the various activities connected with getting a mining lease for BSM is given below:

It can be seen from the above flow chart that it takes around 7-8 years for getting a mining lease. This necessitates the requirement of implementing a sinle window clearance process.

8. HOW TO MAKE BSM MINING A “MAKE IN INDIA “ PROGRAMME

 For making the BSM sector as a real “MAKE IN INDIA” programme, the following actions need to be taken by both the state and central government.

 As proposed in the 2011 draft MMDR Bill based on the recommendations of Department of Atomic Energy and the High Level Committee on National Mineral Policy, these minerals may be classified as “Beach Sand Minerals” (Part-C of the first schedule) and a separate “ Beach Sand Minerals Concession Rules may be brought in along with a monazite policy earlier proposed by Department of Atomic energy and then dropped for reasons unknown.

• Under section 10 A 2 (c), the period for grant of mining lease for the pending mining lease applications, the period may be amended as five years from the MMDR Amendment Act, 2015.
• To amend the threshold value from 0.75% THM to 5% of ROM as done to other minerals. If this is done, there will be substantial development in the BSM sector. There shall not be any reservation to the government sector as this will be against competition commission guidelines. Both private and public sectors shall be treated equally if the government of India is really serious about implementing the “MAKE IN INDIA” programme in BSM sector.
• In case the government is really interested in the development of BSM sector, instead of stipulating the TLV for monazite, it shall stipulate a condition of value addition to the minerals as a requirement to issue mineral concessions with a condition to hand over the radioactive materials to Govt., of India or Department of Atomic Energy. Only if the mining concessions are linked to forward integration by making value addition mandatory for issue of mining concessions, the BSM sector can be brought in the “MAKE IN INDIA”
• There should be a single window approach at the District, State and Central Govt. level for mining, land acquisition, and other related statutory clearances with adequate authority and delegation of powers to take decisions and dispose off quickly all the matters related to BSM mining, so that the lead time can be substantially brought down from the 7-8 years.
• Presently, mining leases are often given selectively for one or two minerals or for all minerals. Needless to state, such selective leasing is contrary to Mineral Conservation. Hence, necessary modifications are required to be made in the rules to not only include all the suite minerals in the lease deed, but also to incentivize exploitation of as many of them as possible.
• A stake holders meeting of all existing BSM mining companies, DAE, MOM, the connected departments of both state and central governments may be convened to discuss threadbare all the issues affecting the implementation of “MAKE IN INDIA” programme in this sector.

If the above actions are implemented, India will become a prominent player in BSM mining and also value addition facilities. All the required technical skill and financial capabilities are available with the present and willing private players in the country to make the mining and value addition of BSM deposits a real “MAKE IN INDIA” program. For making BSM mining and value addition of the minerals a “MAKE IN INDIA” program, the private sector is given permission to exploit all the minerals along with value addition of ilmenite, zircon and monazite and to work hand in hand with the government companies as contemplated in the 1998 BSM policy.

9. CONCLUSION

The first and foremost requirement is to have an open minded discussions with all the stakeholders by the MOM and DAE to look into the negative aspects of these regulations and settle the problems, so that both private and public sector can work hand in hand for the exploitation and value addition of these BSM deposits. If the above mentioned suggestions along with some more genuine requirements of the BSM sector is addressed, the BSM mining sector can really become a “MAKE IN INDIA” programme bringing in valuable foreign exchange to the nation, avoiding foreign exchange outflow, creating jobs to lakhs of people in the underdeveloped sectors in the country, in addition, bringing good revenue both to the state and central governments. This is likely to have a positive impact on the GDP of the nation. This will also provide free nuclear fuels uranium and thorium. The ball is presently with the Government of India to take suitable steps to make necessary changes in the rules for the smooth operation of this sector where private players will have a pivotal role as earlier said, government will not be able to make substantial financial investment.