The mining industry contributes remarkably to the Economy of India. The sand mining industry is one of the key contributors in the mining sector. Sand mining is a process to extract sand and other rare earth minerals from the open pits. These rare earth minerals generally consist of elements like ilmenite, rutile, garnet, zircon, sillimanite, leucoxene and monazite. These seven elements are extensively used in various day to day consumer products, as well as high tech applications.
Due to various conservative policies of government, the potential of private players in this industry is hindered. Beach sand-mining is different in many aspects. It is an important industry whose development is essential not just for India’s economic health but also strategic benefit. Until 1998, rare earth minerals were completely controlled by the government.
Globally, the rare earth mineral market is dominated by China with 97% of the export and India is the second largest exporter. Prices have increased, due to Beijing’s latest restrictions on rare earth minerals export. Countries like United States, France and Japan have being showing interest in the development of Indian rare earth mineral deposits.
In India, one of the largest producer and exporter of rare earth minerals like ilmenite is V. V. Mineral. The Managing Director and CEO of V. V. Mineral, S. Vaikundarajan said, “Though India is home to 35% of global rare earth minerals and 71% of world’s monazite reserve, China dominates the rare earth supply of the world. With a slight change in the policies, India can be the world top player of rare earth minerals.” Further he added, “Keeping in mind the current demand of beach minerals owing to rapid innovation, the Make in India objective of the government won’t be so difficult to achieve.”
Beach Sand Mining sector can turn out to be a triumphant Make In India programme, if appropriate acknowledgment and encouragement is given by the central and state governments.
The political unrest and labour instability has put South Africa’s mining industry at a huge risk. This in turn is bound to affect the nation’s capital. “South Africa’s mining sector accounts for a 7% GDP of the country. With the mining industry facing a downside, it could well be possible that the country’s mining potential is never achieved,” says Vaikundarajan, founder of VV Minerals India, one of the leading sand beach mining companies in the country.
As per the 2016 draft of the Mining Charter, companies are required to keep black ownership at 26%. This rule has not gone well with the Chamber of Mines who has threatened to take the government to the court. “The government did not consult the Chamber of Mines before passing the draft that redresses rules for white-owned companies selling stakes to black business,” informs Vaikundarajan.
The investors are losing confidence in the mining sector due to these two factors – improper governance and labour instability. Losing on investment will result in immediate collapse of the mining sector in South Africa.
“Jakarta government has decided to issue a government regulation on mining to expedite the resolution of issues faced in the mining sector,” says Vaikundarajan, founder of VV Minerals India, one of the largest mining companies in the country.
The 2009 Mining Law draft revision is still being deliberated at the House of Representatives. President Joko Widodo has request to speed up the deliberation. “The law will probably relax the current ore export ban for a limited amount of time,” predicts Vaikundarajan.
When the government of Jakarta imposed the ban on exposed of unprocessed mineral ores in 2015, it was done with an objective of pushing the development of smelters to strengthen the mining downstream sector in the country. Now, the ban has been pushed to January 2017 following complaints from the mining industry.
“Until the revision of 2009 Mining Law, a legal umbrella will be created to avoid any hiatus in the mining sector,” informs Vaikundarajan.
The relaxation of the export ban on mining sector should come as a relief to the Jakarta mining industry.