Even as central govt has introduced a slew of legislative reforms in the coal & mining sector, the introduction of the National Mineral Index could help the mining sector to become competitive and inviting healthy competition in auctions and active participation by smaller mining companies.
In fact, formation of the National Mineral Index (NMI) in line with the National Coal Index could be one of the most historic reforms for this sector.
The decision to open the coal sector for commercial mining, implementation of the National Coal Index, and commencement of the auction process of commercial coal blocks can transform the mining sector. It can help the country save around Rs. 80,000-cr per year on account of coal import by augmenting production in the country. In addition, the auctions are likely to generate a healthy revenue stream and create multiple livelihood opportunities.
The mining sector can benefit from the timely implementation of the already announced mining sector reforms. This includes introduction of a single-stage seamless auction of Exploration cum Mining cum Production regime which is key to attracting best-in-class technology providers from around the globe for partnering and investing in India with a surety of getting the right to produce once the discovery is established.
India fulfils 60% of its aluminium demand from imports even when the domestic production capacity of 4.1 Million Tons is over and above the national requirement of 4 Million Ton. This can be changed by improving the competitiveness of domestic aluminium manufacturers.
A competitive domestic aluminium sector will save annual forex outgo of around Rs.40,000-cr. In addition, it will attract fresh investment of Rs. 1.8 Lakh Crores ($ 25 Billion) into the growing aluminium sector where demand is expected to double to 8-10 mln T in the next 5-yr.
With abundant reserves of bauxite & coal, India has the potential to be self-sufficient, competitive, and be the global alternative to China. In this direction, the decision to allow the joint auction of bauxite and coal can boost aluminium sector.
The mining sector is poised to play a crucial role in the revival of the economy. The changing market scenario and operation dynamics require extensive mining reforms to overcome this situation and turbocharge the economy.
National Coal Index has brought much-needed transparency and efficiency to coal mining. It is high time to introduce the National Mineral Index for expeditious implementation of the mining reforms & accelerated unlocking of the nation’s mining potential which is vital to making India self-reliant.