EVER WONDERED where India stands in the world in production of heavy minerals? Although it has nearly 35 per cent of world deposits, the country’s contribution to the global production is only four per cent. The Heavy Minerals Mining (HMM) industry constitutes only two per cent of the entire mining done in India. That cuts a sorry figure considering these minerals are used for critical applications in diverse industries ranging from electronics to defense. To discuss the issues involved and policy paralysis that plagues the sector, Ramesh Kumar Raja talked to V Subramanian, Director, VV Mineral (VVM), India’s largest producer and exporter of Garnet and Ilmenite. VVM also happens to be the first private Ilmenite exporter in India. Edited excerpts.
Give us a brief overview of the heavy minerals market in India? What is its size?
HMM industry comprises mainly of Ilmenite, Zircon, Rutile, Garnet, Sillimanite and Leucoxene extracted from beach mineral sands found in tailings along the 7,500 kilometres Indian coastline. These minerals also include ones with high specific gravity, such as titanium and rare earths found only in Odisha, Andhra Pradesh, Kerala, Maharashtra and Tamil Nadu. Unlike other major minerals that are fully exhausted after mining, heavy mineral sands are replenishable due to constant winds and beach deposits; only 20 per cent is recovered as minerals, while the balance 80 per cent sand is backfilled into the mined area.
Used for critical applications in many diverse industries, they are also termed strategic minerals. Given these facts, the Atomic Energy Regulatory Board strictly regulates the HMM industry and the sector was opened up to the private players only in 1998. India has nearly 35 per cent of world deposits but contributes only four percent of global production. The total beach sand resources in India are at 942.58 million tonnes.
How much does heavy minerals constitute in the total mining done in India?
The Heavy Minerals Mining industry constitutes a paltry two per cent of the entire mining done in India as the major focus is on mining iron ore, coal, bauxite, etc. India imports most of its requirements as far as Heavy Minerals are concerned, which depletes forex reserves.
Although India possesses the world’s largest reserves of ‘Heavy Mineral sands’ [~ 25- 28 per cent], yet its exploitation is dismally low [~5- 6 per cent]. USA, Australia and South Africa having only about 11-12 per cent reserves each, have more than 25 per cent share in the exploitation of the beach mineral sands.
What are these heavy minerals, where all they find utility and how are they important for Indian economy?
Heavy minerals primarily comprise Ilmenite, Zircon, Rutile, Monazite, Garnet, Sillimanite and Leucoxene. With critical applications in many industries such as electronics, ceramics, pigments, paints, paper, plastics, pharmaceuticals, aerospace and defence – they are also called ‘strategic minerals’ and are important for our economy as they finds applications in a large number of industries.
For example, Garnet is widely used as an abrasive in oil producing companies for corrosion control. Ilmenite and Rutile are Titanium feedstock used mainly for producing Tio2 pigment and small quantities in production of welding electrodes. Zircon is used in ceramic tiles as an opacifier and in refractory for insulation.
Why is the heavy minerals sector still a nascent industry? What are the major policy bottlenecks that have led this industry to grow at such a lethargic pace despite the presence of rich deposits of heavy minerals in India?
Though this is a hundred year old industry, private sector was allowed entry only three decades back. So this budding sector needs government support but in reality, government keeps on imposing more and more restrictions. It is nascent as there is little awareness about this industry and its immense potential to the Indian economy.
Some of the following policy bottlenecks responsible for lethargic growth are enumerated below.
• 18 agencies are involved in granting permission for mining and processing applications out of which 7 are from the state concerned and 11 are from the Central Government
• There are 30 conditions laid down by the Ministry of Environment & Forest while clearing mining projects, some of which are
• The CRZ requirements are also not in favour of Beach Mineral industry. For example, processing units cannot be set in the coastal areas coming under the CRZ. This leads to putting up plants far away from the mining areas which increases the transportation expenses as the remnant sand has to be brought back to the mining site for refilling.
• Export licenses are issued for only one year and renewal is a cumbersome process
• 10 per cent export duty on Ilmenite makes the Indian industry very uncompetitive in international market. No other country has imposed export duty on Ilmenite
• Lack of port infrastructure. Most of the mineral operations are in Tamil Nadu, Kerala and Andhra Pradesh. We don’t have port that’s deeper than 11–13 meters. This makes us ship in small ships, making the freight more expensive.
• Lack of sufficient power, which again makes our own captive generation using diesel generators very expensive, almost thrice the cost of grid power
• Lack of natural gas, forces us to use diesel or furnace oil, which makes us competitive against Chinese Tio2 manufacturers & Cheap
What are the opportunities in the heavy minerals mining sector?
There is plethora of opportunities in this sector. The Government allowed private participation in this industry in the year 1998, only after realizing its massive potential. The HMM industry could yield nearly Rs 30,000 crore to the exchequer if exploited sustainably. Worldwide, mining is akin to oxygen for the manufacturing industry. Without mining, manufacturing would soon collapse like a pack of loose cards. To boost India’s GDP and make inclusive growth a reality, mining needs to grow in a big way and hurdles cleared in the mineral supply of industry. The situation has definitely improved after private players have been allowed in this industry.
We contribute almost close to five per cent of the world’s heavy mineral production. But challenges remain in form of lack of infrastructure, export duty and problems in obtaining mining leases. But given a slight attention from Government, we can easily surpass countries like Australia and South Africa and contribute more than 50 per cent of the world’s production. Our reserves are huge and average percentage of heavy mineral is one of the highest in the world.
Where do you foresee this industry in next five years?
This industry, if driven positively with right policy incentives, can be the most promising sector in the next fi ve years. There is very little awareness about the heavy minerals, but given the diverse applications of Rare Earths in sectors such as electronics, aerospace, defence, etc., it is going to raise the bar for countries like Japan who can’t do without these strategic minerals. The growth can be almost 30-50 per cent.
How can future demand be met?
In the current scenario, Zircon demand in India is close to 130,000 tonnes. But India produces only 50,000 tonnes; rest is imported. Tio2 pigment’s demand stands at about 300,000 tonnes but only 60,000 tonnes is being produced. As for Rutile, Indian demand is around 40,000 tonnes of which, only 18,000 tonnes is produced in the country. Only Ilmenite is being exported, but the infrastructure and policy doesn’t support the value addition of Ilmenite. Globally also, demand for these minerals are going strong and we Indian manufacturers are hardly playing any role other than Garnet. Our domestic market is very young and has a tremendous potential. Current Indian consumption of pigment is only 1.5kg / person, whereas developed countries typically used 4kg / person. The same trend applies for other minerals like Zircon and Rutile as well. Irony is 300 mining applications are pending all over India in this industry. If something is not done by the Government to encourage this industry, we might end up depending on other countries for strategic minerals.
What is your annual output of heavy minerals each year in India?
We export close to 7,00,000 tonnes of heavy minerals each year which is valued at Rs 850 crores approximately.
What is the infrastructure that you have in place? Where does the VV Mineral stand in Indian market and who are its close competitors?
VV Mineral has about eight Mineral separation plants operating in the southern coast of Tamil Nadu and one in Srikakulam, Andhra Pradesh. Each dry plant has own pre-concentration plants near the mine site. We also own a huge fleet of trucks and earth moving equipment, which fully takes care of our logistics requirement. Weown 12 warehouses with a whopping storage capacity of 600,000 tonnes just minutes away from Tuticorin port. have full-fl edged R&D Department, Exploration team with Drill Rig, Centralised laboratory and first of its kind Ship loader (which can load 21,000 tonnes/ day). All these are prominent infrastructure which is unmatched by any other mineral producer in India. We have few fellow mineral producers in India, namely Indian Rare Earth (Government of India), Trimex Sands, Indian Ocean Garnet Sands, and few other small companies. On Global scale, Rio Tinto, Iluka, Tronox, Kenmare are large corporations indulged in this heavy mineral mining.
What support do you need from the current dispensation for developing heavy minerals mining in India?
• Single window clearance for the mining industry as it takes a total number of 28 ministries and departments at state and central levels, leading to a total gestation time of more than 2,800 days (nearly eight years) severely impacting the industry.
• Export Incentives should be provided as the Government last year imposed 10 per cent duty on processed Ilmenite and 5 per cent on unprocessed Ilmenite which make India uncompetitive.
• Restrictive Import policy i.e., Antidumping duty on TiO2, Rutile and Zircon should be done away with.
• Simplification in process for MoEF as well as CRZ clearances for heavy minerals mining or fix a particular time frame for granting the approval
• Lastly, there is not a single large scale world class independent mine operating in free market conditions in India. Ironically, the fallout of the restrictions that India has sought to impose on the extraction of natural resources has only resulted in benefiting China which controls 90 per cent of the industry.