ffilLWiGouranga Sen

MINING in lndia has come

to a crucial juncture where

both the mining industry

and the government have

to commit to scientific and

sustainable mining prac-

tices. While the mining

PSUs are struggling to meet

the increased domestic demand because of in-

herent operational inefficiencies and regulatory

hurdles, private mining is facing permitting is-

sues, land acquisition challenges, financing is-

sues and inexperience. Under such circum-

stances the services of specialist Mine

Developers and 0perators (MDO) would be the

long-term solution for lndian mining industry.

Poor Show of Mining SectorFor a country craving for coming back to an 8%

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plus GDP growth on a sustained basis, the eco-

nomic indicators for mining sector are scary. ln-

dia's mining industry growth rate has turnednegative to -1.4o/o in FY2013-14 from 6.5%

FY2010-11. lndustry's share in the national

economy has also come down from 2.3%

(FY201 0-201 I ) to 1 S% (FY2013-201 ).The ban

on iron ore and manganese mining in the major

producing states like Karnataka, Gca and

0disha has been the root cause.

lndia's minerals trade has also deteriorated,

particularly for bulk commodities like iron ore

and coal. lndia, in spite of being the fourth

largest producer of iron ore in the world, is turn-

ing out to be a major importer of iron ore this

year. 0ur research shows that lndia has already

imported around 5.7 mt during AprOct'14while exports have dwindled to just 3 mt dur-

ing this period making lndia a net importer ofiron ore first time in recent history. india's coal

import has also increased to an alltime high of1 75 mt in FY201 3-1 4. lncreased import of coal

and decreased exporl of ironore have been ad-

versely impacting the national exchequer and

worsening the country's current account deficit ]

L

DECEVBFB2014 tMME2014 I 23

(CAD). At the grass root level, statutory mineclosures have forced large-scale layoffs in theindustry. This has also affected the local allied

services industries like transportation and min-eral processing.

Root Causes of the poor ShowThe root of the problem lies in lndia,s archaic

mining practice. Fragmented and unscientific

mining, with scant regard to the principles ofsustainable development and mineral conser-

vation have invited the wrath of lndia,s judiciary

for the last few years. lndial application of min-erals codg unfortunately, also supports these

unscientific practices. Statutes like Rule 37 and38 are primitive and their interpretations are

grossly illogical,Adding to the woes ofthe indus-

try is the unhealthy competition between thecaptive users and merchant miners.

Many mining projects in lndia failed to take

off or turned un-profitable due to inexperience

in mining. At the operational level, significantlead times in equipment procurement, short-age of skilled manpower, inaccurate assess-

ment of development and mining costs, safety

risks during development and operational

I50

phases of mining and mining financing chal-lenges are impacting both the aspiring and ex-

perienced miners.

Modern mining is a highly specialised opera-

tion and business.A sustainable mining industry

and an associated supply chain demand invest-ment in specialised infrastructure development.

Moreover, many mining projects got crippled

due to problems of land acquisition, forest and

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environmental clearances and Resettlement

and Rehabilitation (R&R) issues for project af-

fected people. 0n the operational parameters,

significant lead times in equipment procure-

ment, shortage ofskilled manpower to operate

and supportthe equipment fleet and mine oper-

ations, inaccurate assessment of development

and mining costs, poor monitoring mechanisms,

managing the safety risks during development

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and operation phases of mining and problems offinancing also poised major challenges not only

to the aspiring miners but also to the hard core

seasoned miners.

MDO-the Way ForwardThis is where super specialised services of Mine

Developers and 0perators (MD0) are required.

MDOs are mining specialists who operate on

behalf ofthe mine owner against a fixed charge

on a long-term basis.Apartfrom initial funding,

they also invest in technology for exploration ofhidden mineral resource, innovative miningtechnology, specialised technologies for mining

optimisation in low grade deposits, benefica-

tion and metallurgical innovations, investments

in innovative infrastructure solutions, community

relationship management and best work prac-

tices in sustainable development.

The MDO model is a proven model in themining oriented countries like Australia and ln-

donesia. Even in lndia, the need of MDO has

been recognised by the government and public

sector enterprises like state owned power generation companies and some subsidiaries of Coal

lndia Ltd have been carrying out mining opera-

tions through MDOs. MD0 brings the follow-ing benefits to mining.

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-

O Assured production in quantityand quality,

allowing mine owners to focus on developing

end-use projects.

O MD0s may finance the mine start-up costtfreeing large capital, which tbe mine owner can

utilise in downstream projects.

O MDOs guarantee production and delivery olmineral at a fixed pricgallowing cost controltothe mine owner.

o MDOs bring operational excellence and ad-

vanced technology to mining and correspon-

ding cost optimisation.

O MD0s also provide mineral exploration serv-

ices including resource assessment and mineplanning, allowing mine owners to get an end-

to-end solution for their mining projects.

O As the MDOs specialise in critical activities

like maintaining expensive equipment, inven-

tories and staff training, even many well-estab-

lished large mining companies outsource theirdevelopment and operation to MDOs.

Appointment of MDOs in mining operations

can substantially reduce many mining chal-

lenges and increase mineral production in an

efficient, scientific and sustainable way.

About Geovale Thriveni Mining ServicesGeovale Services and Thriveni Earthmovers pri-

vate Limited have joined hands to create Geo-

valelhriveni Mining Services to provide a compre-

hensive and world-class MDO services and

solutions in the entire value spectrum ofthe ex-ploration and mining industry. ln ourglobaloper-

ations,with complementary skills and experi-

ence, we provide services in conceptualising,

designing and managing projects at exploration,

pre-feasibility and feasibility studiel statutoryservices, mine development and operation, min-

ing logistics and infrastructure to mine closure.

While Geovale Services is a team of highlyskilled resource professionals with significantglobal experience in managing exploration and

mining projects, Thriveni Earthmovers private

Limited is one of the largest Mine Developer

and Operator (MD0) from lndia operating formore than two decades in different parts of ln-

dia and internationally.We provide end-to-end

solutions and our service range include geolog-

ical exploration, resource modelling, mine plan-

ning, pre-feasibility & feasibility studies, min-

eral market analytics, due diligence, mine

development & operation services, mineral pro-

cessing, mining logistics & infrastructure and

statutory services.

At the lnternational Mining and Machinery

Exhibition (IMME 2014) at Kolkata, you can in-

teract with our technical team at stall no. 1 36

at hangar B during December 3-6,2014. More in-

formation is available on our websites-www.geovale. com and www.thriven i. com.

-Th e author is a pri ncipal a na lyst,

Geovale Services

DECEi/BER 20141'urr mo

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