Mining Industry in India - An overview

Minerals constitute the back-bone of economic growth of any nation and India has been
eminently endowed with this gift of nature. There are many evidence that exploitation of
minerals like coal, iron-ore, copper, lead-zinc has been going on in the country from time
immemorial. However, the first recorded history of mining in India dates back to 1774
when an English Company was granted permission by the East India Company for
mining coal in Raniganj. M/s John Taylor & Sons Ltd. started gold mining in Kolar
Gold Fields in the year 1880. The first oil well was drilled in Digboi in the year 1866 -
just seven years after the first ever oil well was drilled anywhere in the world viz. in
Pennsylvania State, USA in 1859. Mining activities in the country however remained
primitive in nature and modest in scale uptill the beginning of the current century.
Thereafter, with progressive industrialisation the demand for and hence the production
of various minerals gradually went up. After India became independent, the growth of
mining under the impact of successive Five Year Plans has been very fast. There are
ambitious plans in coal, metalliferous and oil sectors to increase production of minerals
during the 8th Five Year Plan and thereafter.

Coal: Deposits & Exploration

India’s major workable coal deposits occur in two distinct stratigraphic horizons -
Permian, commonly known as "Gondwana" coals and the Tertiary. About 99% of the
country’s coal resources are found within a great succession of fresh water sediments.
The major coalfields are represented by isolated basins which occur along prominent
present day river valleys, viz., Damodar, Koel, Sone-Mahanadi, Pench-Kanhan, Pranhita-
Godavari. Nearly 50 coalfields, varying in size from a few km2 to as much as 1500 km2
are known today, barring the small and lenticular occurrences of coal along the
Himalayan foothills.

Coals of practically all ranks occur in India except peat and anthracite. The share of
lignite, however, is insignificant as compared to sub-bituminous and bituminous coal.
Indian bituminous coals are broadly divided into two categories, coking and non-coking.

Coal exploration in India even today is largely being carried out by conventional methods
of systematic geological mapping followed by drilling, core drilling playing a dominant
role. However, in the recent times modern exploration techniques like photo-geology,
remote sensing, non-coring drilling, geophysical surveys etc. are being increasingly used
for detailed and precise exploration.

Coal Reserves

The total coal reserves of the country have been estimated from time to time.

* Proved Reserves: In this case, the reserves are estimated from dimensions revealed in
outcrops, trenches, mine workings and boreholes and the extension of the same for
reasonable distance not exceeding 200m on geological evidence. Where little or no
exploratory work has been done, and where the outcrop exceeds one km in length,
another line drawn roughly 200m in from outcrop will define a block of coal that may be
regarded as proved on the basis of geological evidence.

* Indicated Reserves: In the case of indicated reserves, the points of observation are
1,000 m apart, but may be 2,000 m for beds of known geological continuity . Thus a line
drawn 1,000 to 2,000 m from an outcrop will demarcate the block of coal to be regarded
as indicated.

* Inferred reserves : This refers to coal for which quantitative estimates are based largely
on broad knowledge of the geological character of the bed, but for which there are no
measurements. The estimates are based on an assumed continuity for which there is
geological evidence, and more than 1,000 to 2,000 m from the outcrop.

Statewise and depthwise Coal reserves are given in the following table,

In Million Tonnes

State 0-300m 300-600m 600-1200m Total

West Bengal 11999 8933 4191 25123
Bihar 40079 17626 6666 64371
Madhya Pradesh 32638 7433 14 40085*
Maharashtra 4590 1686 - 6276
Orissa 35015 11167 37 46219
Andhra Pradesh 5245 3876 1717 10838
North Eastern Region 710 155 - 865
Total 130276 50876 12625 193777
Percentage 67 26 7 100

* includes 1062 Million. Tonnes in UP

The following table gives the Statewise reserves indicating different categories,

State Proved Indicated Inferred Total Percentage of

total reserve
West Bengal 10590 10867 3666 25123 13
Bihar 28993 28801 6579 64373 33
Madhya Pradesh 9387 20480 9156 39023 20
Uttar Pradesh 662 400 - 1062 1
Maharashtra 3170 1179 1927 6276 3
Orissa 5714 22120 18384 46218 24
Andhra Pradesh 6079 916 3843 10838 5
North Eastern 257 149 458 864 1
Region
Total 64852 84912 44012 193777 100
Percentage 33 44 23 100

Thus, India’s total coal resources now stand at a level of a little over 194 billion tonnes in
coal seams of thickness 0.9m and above and upto a depth of 1200m. This is a little over
1% of the global coal resources. Of the total coal reserves of 194 billion tonnes, 85% is of
non-coking variety and only 15% is of coking variety. Further, 33% of the reserves fall
under ‘Proved’ category 44% in the ‘Indicated’ category and 23% in the ‘Inferred’
category. The coal occurring between 600m and 1200m depths, which may be
economically tapped for development in future, may be grouped as "Resources" and the
rest as "Reserves".

Lignite Resources

The total lignite deposit of the country is estimated at about 2800 million tonnes, out of
which the major deposit is occurring in Tamilnadu ( 2500 million tonnes). The remaining
lignite deposits are found in Gujrat, Jammu & Kashmir and Rajasthan. Further
exploration activities indicate availability of additional lignite resources in Rajasthan,
Gujrat and Tamilnadu.

Mineral Resources (Other than Coal & Oil)

India is largely self sufficient in most of the minerals which include barytes, bauxite,
chromite, dolomite, fluorspar, gypsum, iron ore, kyanite, limestone, manganese ore,
magnesite, sillimanite, etc. except the minerals like copper, asbestos, lead and zinc,
natural phosphates, sulphur and crude petroleum, in which domestic production meets the
demand only partially.

India is rich in the resources of minerals like iron ore, bauxite, manganese, baryte etc. It
has resources of 12745 million tonnes of iron ore, 2,525 million tonnes of bauxite, 76446
million tonnes of limestone, 233 million tonnes of magnesite, 167 million tonnes of lead
& zinc ore, 70 million tonnes of barytes, 176 million tonnes of manganese ore and 90
million tonnes of chromite. The reserves of iron ore, bauxite and manganese accounts for
nearly 7 per cent, 16 per cent and 6 per cent respectively of the total known global
resources of these minerals. India possesses the largest known reserves of barytes in the
world.

Oil Resources
India has prognosticated hydrocarbon reserves of more than 17 billion tonnes of which
only about 5 billion tonnes have been converted into geological in-place reserves. This
brings out the magnitude of exploratory efforts still to be carried out. The proved and
indicated balance recoverable reserves of crude oil and natural gas are given in the table
below:

Reserves of Crude Oil & Natural Gas

State Crude Oil Natural Gas

Gujrat 143.02 62.11
Assam, Nagaland & 124.38 106.27
Rajasthan
Bombay High 371.04 411.09
Total (All India) 638.44 579.47

* Crude Oil in million Tonnes, Natural gas in Billion Cubic metre

Operating Mines

India has a unique blend of big and small, manual and mechanised, opencast and
underground mines. The total number of working coal mines as on date are 572, in oil
sector there are 29 oil projects excluding installations off-shore beyond territorial waters.
As far as metalliferous mines are concerned the number of mines which are submitting
returns stands at about 2,500. However, there are many more mines which are small in
size, seasonal in nature and which are not submitting the statutory returns, a fair estimate
indicates that total number of metalliferous mines are about 6000. Total workforce of the
mining industry in India consists of about one (1) million workers.
Mining in India: Legacy of the past

Coal mining

The development of coal mining in India was historically linked with the development of
the railway system. Establishment of the railway lines prompted many companies to take
up mining leases. Large number of mining leases were granted by the erstwhile
Zemindars and Rajahs, the terms of leases and the periods varied, some being in
perpetuity, some for 999 years and other for shorter periods. With the increasing
awareness of the values of the properties, lease periods became shorter and leased areas
smaller. By the end of the World War I the prolification of small owners became a
problem and the coal mines of Raniganj & Jharia came to acquire all the characteristics
which created chronic problems in future years.

From as early as the 1920’s, the various consultants, commissions and committees sat
over to decide on the question of conservation and scientific exploitation of coal, working
conditions in the mines and safety of the work persons, and thereby regulate and control
the coal industry in India. All of them emphasised the necessity to have state ownership
of the coal mines. The overall problem of coking coal in India has been studied in depth
by a whole herd of prestigious committees including the Indian Coal Mining Committee
(1937), the Indian Coalfields Committee (1946), the Committee on Metallurgical coal
conservation (1950). The Estimates Committee of the Lok Sabha (1954-55) took notice
of the evidence submitted by different agencies. The then Coal Commissioner in his
evidence to the estimates committee wrote among other thins.

".............. we will be left with a number of units, which if not affected by underground
fires, and other hazardous conditions, would be uneconomic to work." The architect of
coal nationalisation, the late S. Mohan Kumaramangalam, the then Minister of Steel and
Mines had given a vivid description of the mines of Jharia coalfield in his book "Coal
Industry in India".
"Slaughter mining, lack of conservation and unscientific methods remained characteristic
of large areas of the industry ....................... lack of safety & welfare measures, robbing
of pillar of coal, selectives, seasonal and shallow depth mining in a haphazard manner,
etc. seemed to be the guiding principles of a large number of the private collieries."

All these, led to the take-over of coking coal mines on the 16th October, 1971.
Subsequently, these mines were nationalised on the 1st May, 1972 and are now operated
by M/s.Bharat Coking Coal Limited (BCCL). By Coal Mines (Taking over of
Management) Ordinance 1973 the non-coking coal mines were also taken over. The
mines were nationalised on the 1st May, 1973 and brought under the management of the
Coal Mines Authrority Limited (CMAL). Later on the CMAL and the BCCL were
merged and the holding company Coal India Limited (CIL) was formed on the 1st
November, 1975.

The beginning of coal mining in Central provinces dates from the year 1862 and in the
Rewa state from 1884. The Singareni field in the Hyderabad state had been discovered in
1872 and went into production some 15 years later. Appreciable development also took
place in Upper Assam from 1881 and in Baluchistan and Punjab (now in Pakistan) in the
last decade of the 19th century. Bokaro Karanpura areas were first examined between
1846 and 1848. Development of the Bokaro field commenced in 1915. Production from
the Karanpura field did not commence until 1925.

No .of Coal Mines in India – Company Wise as on 31.03.2004

Company No. of Collieries

OC UG Mixed Total
COAL:
1. ECL 18 92 2 112
2. BCCL 15 49 16 80
3. CCL 35 22 6 63
4. NCL 8 0 0 8
5. WCL 33 42 5 80
6. SECL 19 76 2 97
7.MCL 14 9 0 23
8.NEC 2 5 0 7
Total CIL 144 295 31 470
(1 to 8)
SCCL 12 55 0 67
BSMDCL 1 0 0 1
DVC 1 0 0 1
IISCO 0 1 2 3
JKML 1 3 0 4
BECML 1 0 0 1
ICML 1 0 0 1
JSPL 1 0 0 1
TISCO 2 5 0 7
TOTAL COAL 164 359 33 556
LIGNITE:
NLC 2 2
GMDCL 2 2
GIPCL 1 1
RSMDCL 1 1
TOTAL 6 6
LIGNITE
TOTAL COAL + 170 359 33 576
LIGNITE

NO OF COAL MINES – SECTOR WISE AS ON 31-03-2003

STATES NO OF COLLIERIES
OC UG MIXED TOTAL
COAL PUBLIC 160 354 33 547
COAL PRIVATE 4 5 0 9
LIGNITE 5 5
PUBLIC
LIGNITE 1 1
PRIVATE
TOTAL 170 359 33 562

NO OF COAL MINES – STATE WISE AS ON 31-03-2003

STATES NO OF COLLIERIES
OC UG MIXED TOTAL
COAL:
ANDHRA 12 55 67
ASSAM 2 4 6
CHHATTISGARH 12 44 2 58
J&K 1 3 4
JHARKHAND 60 85 24 169
MADHYA 18 53 4 75
PRADESH
MAHARASHTRA 28 21 1 50
MEGHALAYA 1 1
ORISSA 14 9 23
WEST BENGAL 14 84 2 100
UP 3 3
TOTAL COAL 164 359 33 556
LIGNITE:
GUJARAT 3 3
TAMIL NADU 2 2
RAJASTHAN 1 1
TOTAL LIGNITE 6 6
TOTAL COAL + 170 359 33 562
LIGNITE

Metalliferous Mines

At the turn of the century, India produced 14 minerals of commercial value. Now, the
country produces 11 metallic and 45 non-metallic minerals except coal and oil. In India,
production of minerals dates back to ancient times. Remnants of old workings can still be
seen in some parts of the country. In fact, some of these have led to the discovery of
several large mineral deposits which are being worked today like Lead & Zinc in Zawar,
Copper in Khetri, Gold in Karnataka etc. Despite the active past, the metal mining
activities in the country remained dormant over a long period until the beginning of this
century.

Growth of the Industry

The post- Independence era witnessed a massive expansion of exploration activities

through various five-year plans which included the augmentation of mineral inventory as
well as addition of a number of mineral reserves to the existing ones. This took the
country into the realm of plenty in respect of some minerals which were earlier regarded
as scarce.

The search for minerals did not remain only on the land mass alone but extended to off-
shore areas and deep seas. Large reserves of oil were discovered in the off-shore areas
and their exploitation opened up new and exciting vistas in the oil sector thereby
conserving huge foreign exchange reserves. In the Indian Ocean, India has explored
successfully the presence of poly metallic nodules lying on the ocean floor at a depth
exceeding 3000 metres which bear metals such as copper, cobalt, nickel, manganese, etc.

Keeping with the spirit of Industrial Policy for higher targets of mineral production, the
expansion and augmentation of mineral based industry in the country was quite obvious.
Therefore, ambitious programmes were launched to increase the production of minerals
to meet the ever growing demand of the core industries like steel, non-ferrous metals,
fertilisers, etc. keeping in view also the higher exports for much needed foreign
exchange. Many public sector organisations were set up to take up exploration and
exploitation of minerals and the state assumed direct responsibility for developing mines
of important minerals and establishing mineral based industries. Thus there were
increases not only of minerals but also in the metal production as well as cement,
chemicals, fertilizers and several other mineral based products.

The table below indicates the trend in growth of production of some important minerals
in our country.

Production in Million Tonnes

Year Coal Copper Ore Lead & Iron Ore Limestone Bauxite
Zinc Ore
1951 34.98 0.37 0.01 3.71 2.96 0.06
1961 55.71 0.42 0.15 12.26 15.73 0.48
1971 75.64 0.68 0.30 32.97 25.26 1.45
1981 127.32 2.01 0.96 42.78 32.56 1.75
1991 237.76 5.05 1.82 60.03 75.02 3.86
1993 260.60 5.15 2.10 63.26 87.72 4.81
1994 267.52 4.78 1.90 64.91 86.77 4.70
1995 284.59 4.77 2.10 73.00 93.64 5.09
1996 304.10 4.75 2.06 71.59 120.87 5.35
1997 316.68 4.26 2.01 78.36 123.56 5.17
1998 319.90 4.38 2.23 77.34 116.61 5.91
1999* 313.55 3.28 3.08 73.05 108.29 5.24

*Provisional
In the last two decades, coal mining has witnessed a phenomenal growth in production
from 70 million tonnes in 1971-72 to 246 million tonnes in 1993-94 and is projected to
touch about 400 million tonnes by the turn of the century.

The strategies adopted for rapid expansion of mining activities include increased
mechanisation, adoption of new technologies & their adaptation under Indian geo-mining
conditions and assimilation of latest scientific innovations in the concerned areas.
However, it has also brought in its wake increased hazard potential posing new problems
of safety management.

The new liberalised industrial policy may lead to high and accelerated growth in mineral
industry to complement and supplement the revival and rapid growth of national
economy. The present day environment demands of us to have a fresh look at safety
management as a structured process composed of well defined systems that emphasises
continuous improvement in work quality, health, welfare and productivity of workforce
engaged in mineral industry through setting up of improved safety standards and their
effective implementation and administration.

Minerals & Economy

The gross value of mineral production in India in 1995 is estimated to be approximate

Rs.2,70,000 million up from about Rs.1,800 million in 1961, i.e. by nearly 150 times.
Mineral wealth and its exploitation have substantially contributed to the growth of
national economy. The contribution of mineral production to the Gross National Product
went up from 1.02% in 1960-61 to 1.54% in 1980-81. Minerals continued to play a vital
role in India’s overseas trade too.

Employment

With the growth of production, employment in the mineral industry has also grown
phenomenally during the last few decades. The following table indicate the trends:

Average daily employment in Mines ( in '000 )

Year Coal Oil Copper Gold Iron Lime Mang. Mica Stone Others Total
 Ore Ore Ore Stone Ore Metals
1951 351.9 N.A. 3.7 21.9 20.2 16.0 55.5 25.2 5.1 49.5 197.1
1961 411.2 N.A. 4.2 16.3 54.5 54.6 46.9 29.6 8.5 45.1 259.7
1971 382.3 13.6 7.6 12.4 52.8 53.2 30.4 12.2 8.8 57.5 234.9
1981 513.4 14.5 13.4 12.3 44.9 49.8 26.5 6.7 7.7 60.6 221.9
1986 543.3 24.9 13.2 11.9 46.6 50.2 17.7 3.3 10.2 68.1 221.2
1987 549.7 25.9 12.6 11.6 48.8 51.2 17.6 3.3 10.8 69.6 225.5
1988 537.8 26.6 12.3 10.9 46.0 43.0 17.4 2.8 14.2 60.5 207.1
1989 548.1 25.2 10.8 10.5 44.5 44.6 16.1 2.9 12.9 62.0 204.3
1990 549.0 26.9 12.3 9.7 38.1 41.5 17.3 2.3 10.1 58.0 189.3
1991 554.1 35.5 12.8 9.3 40.1 43.5 17.9 2.2 11.2 63.2 200.2
1992 552.0 35.7 12.7 9.4 42.0 43.0 18.4 1.6 8.9 67.2 203.2
1993 546.3 33.5 12.2 7.9 39.8 41.6 18.5 1.5 9.2 68.9 199.6
1994 523.7 34.3 11.2 7.4 38.5 39.8 18.2 1.7 9.4 65.2 191.4
1995 513.3 34.0 10.5 7.1 39.6 39.8 18.1 1.8 7.5 64.4 188.8
1996 506.4 33.4 9.9 6.9 39.2 35.7 18.1 1.2 5.2 60.1 176.3
1997 503.4 28.6 10.3 6.8 38.6 33.0 16.0 1.2 4.9 61.6 172.4
1998 491.3 29.5 8.7 6.1 37.3 31.2 15.9 1.1 5.3 59.3 164.9
1999* 486.7 25.0 7.3 6.1 38.7 30.0 14.8 0.9 4.9 63.0 165.7

*Provisional

Although no firm figures regarding %age of persons employed under contractors in

mineral industry could be ascertained but during the visit of the sub-committee of the
installations in Kalol oil fields under ONGC, it was reported that approximately 25% of
the total workforce engaged at work were employed under contractors on one pretext or
the other.

The trend reveals that there has been a gross reduction in employment potential in
winning of gold ore, manganese ore and mica . This has come about basically due to two
reasons . Firstly the lack of demand of the minerals due to substitution of the same in the
user industry viz. the manganese ore in manufacture of steel & mica as insulating
material in electrical industry, secondly to the rising cost of production of gold from the
poor quality of gold ore available in the country vis-à-vis global market. Barring above
the employment in the mineral industry has shown tremendous growth over the years. It
is anticipated that the average daily employment in the mineral industry at present is
about 1(one) million.

Exploitation of resources: Problems faced

Mining industry in India has been progressing at an annual rate of 4% to 5% during the
last three decades. It appears that the concept of ‘growth at all cost’ has become the order
of the day. This is rather too heavy a price to pay for development’s sake. This ‘mad
rush’ to produce gives way to unsustainable developments.

As far as mining is concerned, the price for progress has also been quite high. The late S
Mohan Kumarmangalam, the then Minister of Steel & Mines had given a scathing but
vivid description of the coal industry scene in his book ‘Coal Industry in India’. This was
generally true of smaller units specially spread over in the Jharia and Raniganj fields.

"Workers were cheated of their legitimate dues. Slaughter mining, lack of conservation
and unscientific mining methods remained characteristic of large areas of the industry.
The mine owners successfully prevented any further progress towards implementation of
the numerous recommendations of the different committees made over the years.
‘Lathials’ or musclemen protected the interests of the mine owners. Rampant corruption,
forced labour, dubious and duplicate records, under reporting of production, non-payment
of full wages, extended hours of shift without payment of lead or lift, lack of safety and
welfare measures, robbing of pillars of coal, selective, seasonal and shallow depth mining
in a haphazard manner etc. seemed to be the guiding principles of a large number of
private collieries."

Violations of mine safety laws were widespread. The extensive fires and collapses were
the result of unscientific mining practiced over the years and the cost to the nation was
considerable in the shape of loss of coal reserves and in controlling fires. Mine
ventilation was poor, support inadequate, safety equipment conspicuous by their absence.
The hazards to which workers were exposed had been a matter of severe criticism. A
dangerous situation had developed and the Government could no longer remain a passive
spectator. This paved the way for nationalisation of the coal industry during 1971-73.

Though the situation since then has improved considerably in some of the areas, many
problems of the past remain and need to be addressed sincerely at this point in time.
Quest for development has to go hand in hand with rapid industrialisation, and mining
has to remain an important cog in the wheel of development. It is expected that
accentuated efforts on mining shall be witnessed in the years to come. As the mine
operators begin to look forward for ways and means to improve efficiency and cut costs,
safety considerations certainly assume more and more important position and emerge as
significant factor even purely on economic considerations. Side by side modern society is
also tending more and more to demand a safe and decent work environment, as a social
need. Thus, results are being demanded. Tools and skill are available, and achievement
with tremendous humanitarian and economic benefits are within the realm of practical
possibility.