The mining business in India would continue to be uncertain and face problems in 2013-14. This is because of uncertainty in regulatory regime, declining global commodity prices and the Mines and Minerals Development & Regulation (MMDR) Bill not being in place, say industry watchers.

“A robust regulatory framework for the mining sector is still eluding us. We do not expect regulatory issues to be resolved soon. May be 2014 would see some finality on regulatory framework for mining,” said Anjani K. Agrawal, National Leader (Mining and Metals Sector) at Ernst & Young LLP.

Currently, mining operations face ban in three States – Karnataka, Odisha and Goa. It led to revenue downturn in several companies including Sesa Goa, Rungta Mines, and Patnaik Minerals.

Also the Odisha Government slapped notices and imposed fines of Rs 50,000 crore on companies such as Tata Steel, Aditya Birla Group firm Essel Mining and Sarada Mines. The miners were blamed for alleged illegal mining.

After Supreme Court gradually lifted the ban on select mines in Karnataka, the miners are expecting similar resolution in Goa and Odisha.

“Re-opening the mines takes time. Once an operational mine is suddenly stopped, it is not easy to re-start. There are logistics and labour issues,” said an official from a private mining company.

According to estimates, the mining ban cost nearly Rs 55,000 crore of iron ore exports last financial year. During April 2012-January 2013, India’s iron ore exports fell about 68.27 per cent to 16.35 million tonnes year-on-year.

On the other hand, non-ferrous metal industry is bracing for challenges such as rapid capacity expansion of input minerals, developing indigenous technological expertise and cost reduction, among others, pointed out in a joint study by Indian Chamber of Commerce and Deloitte.

At present, aluminium is the fastest growing non-ferrous metal and its production volume is next only to steel. Domestically, the demand and consumption of aluminium is projected to rise to about three million tonnes by 2017 from nearly 1.71 million tonnes now. By 2030, aluminium consumption growth will be driven by China and India, said a Deloitte study.

Also, copper is accounts for third in consumption after steel and aluminium. India is also among the top five zinc mining countries globally.

For global players, India is a big market for mineral resources, as metals and power demand is expected to have robust growth in long term.

“However, regulatory and other hurdles are holding back investments. Despite 100 per cent foreign direct investments allowed in mineral exploration, there is tepid response from global miners,” said Agrawal of Ernst & Young.

siddhartha.s@thehindu.co.in

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