KOLKATA (miningweekly.com) – The Indian mining industry is in chaos and instead of realising the industry’s potential to generate employment, it is suffering massive job losses and struggling to create new employment, the apex industry body says.

The Federation of Indian Mineral Industries (FIMI) states that a mix of lopsided government policy, poor implementation and adverse court orders have crippled the mining sector.

FIMI laments that mines have been either shut down as in Goa, or are working at reduced levels in states like Karnataka, Odisha and Jharkhand and as a result, about 200 000 people have lost their livelihood and ten times that number who are indirectly linked to the industry have been affected.

“Furthermore, India is staring at worse employment loss due to the expiry of the mining leases of 329 non-captive mines on March 31, 2020. Of the 329 mines 48 are working mines. The closure of these mines will hit production of 50-million to 60-million tons a year of raw material, mainly iron-ore, threatening more direct and indirect job loss of 264 000,” says FIMI in a report.

The organisation says the mining industry, excluding crude and natural gas, employs about 2.32-million directly and is responsible for the livelihood of 20-million to 30-million people.

It notes that if the right kind of government support and reforms are forthcoming, the mining sector could grow employment by about 4.82-million directly by 2025, and 50-million indirectly.

FIMI’s focus on job losses in the mining industry comes at a time when unemployment in the country is at a 45-year high. For example, the estimate of job losses in domestic automobile manufacturing ranges between 280 000 and 350 000 over the past few months.

Highlighting some of the lop-sided policies crippling the domestic mining industry, FIMI has laid a large part of the blame on the adoption of the auction route for allocation of mineral resources, which it maintains is inefficient and an expensive way to develop mineral assets, resulting in cost and time overruns.

Auctions create artificial scarcity and remove the opportunity to create jobs and, in fact, the methodology of allocating natural resources over the past four years has failed to achieve objectives.

Citing figures, the domestic mining industry claims that between 2015 and 2019, none of the mining leases have been executed for the 42 greenfield mineral blocks auctioned and that mining leases have been executed in the case of only four of the 14 operational category C mines, even though these mines came with pre-existing environmental and forest clearances.

Prior to the auction regime, which came into force in 2015, there were 66 477 mining applications pending with the central and state governments. All these applications became null and void once auction was made mandatory through the Mines and Minerals (Development and Regulation) Act 2015, with FIMI holding that even if 50% of the applications had been approved, the industry would have been able to generate significant employment, instead of having to face job losses.

If the mining sector is to realize its job potential and reverse the rocketing unemployment levels, the government has to revert to a first-come, first-serve policy in allocating mineral resources, followed by extending all existing mining leases to private miners to 2030 and thereafter by 20 years at a time, beyond the stipulated period of 50 years for all non-captive mines.