Page 17 - The Mineral Development and Regulation Framework in India (English Version)
P. 17
Discussion Paper
captures the locational and downstream advantages, important metals can be extracted in this way,
but it is administratively difficult and few countries have such as Molybdenum and Selenium from Copper
been able to implement it successfully at present. Sliding ore, Cadmium and Germanium from Zinc ore
scale ad-valorem royalty is used in several countries and and as is well known, Gallium and Vanadium
has the advantage of being easier than income or profit- from Bauxite. The concession grant system must
based royalties. strongly disincentivize resource use inefficiency,
and equally strongly incentivize investments
In any framework where there is likely to be a mix in process R&D. The fact that currently there
of “allocated” mines (to PSUs), mines acquired through is no extraction of Nickel from the Chromite
prospecting, as well as mines acquired through bidding, overburden, and we are importing all our Nickel
the sliding scale royalty acts to reduce the extent of the underscores the nature of the diseconomies
“non-level” playing field, and thus promotes efficiency. in the present system. The 12th Plan Working
Group on the Minerals Sector has observed as
Needless to say, operationalizing bidding systems, follows in this regard: “... attention needs be given
to whatever extent they are retained, would also need to beneficiation and agglomeration techniques to
much higher levels of regulation and governance both bring lower grades and finer particle size material
at the Central and State levels, not least with regard into use. … The issue of promoting process R&D
to resource estimations and valuations, and it would (including beneficiation) needs to be considered in
in fact be prudent to also focus on governance reform depth. While at one level CSIR Labs and IBM can
and regulation and technical strengthening first. do ‘public good’ process R&D based on regional
samples, deposit-specific process R&D needs to be
Ensuring environmental sustainability done by the concessionaire on a commercial basis
and zero-waste mining (though CSIR Labs and IBM can do such work for
the concessionaire on a job basis). In intermediate
The failure to address sustainable development R&D space, where the feasibility of the deposit is the
concerns is at the heart of the current problems of question, process R&D to conduct feasibility studies
the mining sector. The Ministry of Mines has worked constitutes a high-risk high-reward situation. IBM
out a sustainable development framework, but clearly or CSIR Labs cannot take up this work and creation
it needs legislative backing and regulatory teeth. The of a venture-capital funded process R&D setup (on
following four features are particularly noteworthy in the analogy perhaps, of the pharma industry and as
this regard: obtained in advanced mining jurisdictions) is clearly
required if the concept of zero waste mining is to
To ensure resource use efficiency, it is necessary be taken to its logical conclusion. Incentives, fiscal
that the entire deposit is properly delineated and as well as non-fiscal, need to be structured based
economically extracted through a technically on a detailed study of how the system works in
sound Mining Plan. Development of capability countries such as Australia and Canada, in particular
within the sector to prepare technically Australia’s CSIRO and CRC mechanisms.”
appropriate Mining Plans which maximizes
mineral extraction (including beneficiation of low A scientifically and technically appropriate Mine
grade ores) and minimize environmental damage Closure Plan based on the plan of mining
is key to this process. Equally important is the is essential to be able to close a mine as the
need to develop capacity to approve and enforce deposit gets exhausted. Development and
such Mining Plans. implementation of Progressive and Final Mine
Closure Plan is thus dependent on adoption of
The Mining Plan needs to ensure commercial the entire framework of scientific exploration
extraction of secondary or minor metals which and technically sound mining. However, the
often occur in association with the major metal
in the mineral. The issue is far more important JANUARY 2015 17
than is commonly realized. Many strategically
captures the locational and downstream advantages, important metals can be extracted in this way,
but it is administratively difficult and few countries have such as Molybdenum and Selenium from Copper
been able to implement it successfully at present. Sliding ore, Cadmium and Germanium from Zinc ore
scale ad-valorem royalty is used in several countries and and as is well known, Gallium and Vanadium
has the advantage of being easier than income or profit- from Bauxite. The concession grant system must
based royalties. strongly disincentivize resource use inefficiency,
and equally strongly incentivize investments
In any framework where there is likely to be a mix in process R&D. The fact that currently there
of “allocated” mines (to PSUs), mines acquired through is no extraction of Nickel from the Chromite
prospecting, as well as mines acquired through bidding, overburden, and we are importing all our Nickel
the sliding scale royalty acts to reduce the extent of the underscores the nature of the diseconomies
“non-level” playing field, and thus promotes efficiency. in the present system. The 12th Plan Working
Group on the Minerals Sector has observed as
Needless to say, operationalizing bidding systems, follows in this regard: “... attention needs be given
to whatever extent they are retained, would also need to beneficiation and agglomeration techniques to
much higher levels of regulation and governance both bring lower grades and finer particle size material
at the Central and State levels, not least with regard into use. … The issue of promoting process R&D
to resource estimations and valuations, and it would (including beneficiation) needs to be considered in
in fact be prudent to also focus on governance reform depth. While at one level CSIR Labs and IBM can
and regulation and technical strengthening first. do ‘public good’ process R&D based on regional
samples, deposit-specific process R&D needs to be
Ensuring environmental sustainability done by the concessionaire on a commercial basis
and zero-waste mining (though CSIR Labs and IBM can do such work for
the concessionaire on a job basis). In intermediate
The failure to address sustainable development R&D space, where the feasibility of the deposit is the
concerns is at the heart of the current problems of question, process R&D to conduct feasibility studies
the mining sector. The Ministry of Mines has worked constitutes a high-risk high-reward situation. IBM
out a sustainable development framework, but clearly or CSIR Labs cannot take up this work and creation
it needs legislative backing and regulatory teeth. The of a venture-capital funded process R&D setup (on
following four features are particularly noteworthy in the analogy perhaps, of the pharma industry and as
this regard: obtained in advanced mining jurisdictions) is clearly
required if the concept of zero waste mining is to
To ensure resource use efficiency, it is necessary be taken to its logical conclusion. Incentives, fiscal
that the entire deposit is properly delineated and as well as non-fiscal, need to be structured based
economically extracted through a technically on a detailed study of how the system works in
sound Mining Plan. Development of capability countries such as Australia and Canada, in particular
within the sector to prepare technically Australia’s CSIRO and CRC mechanisms.”
appropriate Mining Plans which maximizes
mineral extraction (including beneficiation of low A scientifically and technically appropriate Mine
grade ores) and minimize environmental damage Closure Plan based on the plan of mining
is key to this process. Equally important is the is essential to be able to close a mine as the
need to develop capacity to approve and enforce deposit gets exhausted. Development and
such Mining Plans. implementation of Progressive and Final Mine
Closure Plan is thus dependent on adoption of
The Mining Plan needs to ensure commercial the entire framework of scientific exploration
extraction of secondary or minor metals which and technically sound mining. However, the
often occur in association with the major metal
in the mineral. The issue is far more important JANUARY 2015 17
than is commonly realized. Many strategically
