Jharkhand: The Goldmine Of Growth

13 February 2017

Despite being one of India’s youngest states, mineral-rich Jharkhand is at the forefront of the country’s drive toward economic prosperity. The eastern state, chiseled out of southern Bihar in 2000, won a resource lottery that’s led it down a path of enviable development and growth.

Blessed with 40 percent of India’s mineral capacity, Jharkhand is the country’s third-largest mineral producer. The mining sector’s output was valued at 15,829 crore in 2016, with a growth rate pegged at 8.4 percent.

With a labour force skilled in the end-to-end mining process – from exploration to extraction and transport – there’s unmet potential for the industry to truly ignite India’s economy.

Mining contributes more than 70 percent to Jharkhand’s non-tax revenue and contributes 12.25 percent to its gross state domestic product. It has also brought employment, a higher standard of living and tourism to Jharkhand’s almost 32 million residents. What’s more, the state also ranks first in terms of labour reforms and inspection-related compliances in India.

Due to its diversified rock formations, Jharkhand is considered something of a geological freak of nature. The story of its mineral assets is best told in numbers:

Coal

With more than 80,000 million tonnes in coal reserves, Jharkhand has 27 percent of India’s coal, which meets around two-thirds of the country’s energy needs. The state is endowed with almost all of India’s prime coking coal reserves, most notably in the Jharia coal field.

Bharat Coking Coal Ltd. and Eastern Coalfields Ltd. are some of the players operating in Jharkhand’s coal fields.

Iron ore

Jharkhand produces 26 percent of India’s iron ore, with more than 4,500 million tonnes worth of reserves. There are more than 3,000 million tonnes of hematite (the main ore of iron) in the state, with Chiria in Singhbhum district holding one of the world’s largest single hematite deposits.

Tata Steel operates an iron ore mine in Noamundi.

Mica

Jharkhand is India’s leading producer of mica, with 46 percent of the country’s reserves clustered around Koderna district. Mica has many uses including being an important component in cosmetics, drywall and auto parts.

Copper

A concentration of copper ore mines can be found in East Singhbhum district, in Jharkhand’s southeast. The state has 288 million tonnes of copper ore reserves – 20 percent of the Indian total.

Hindustan Copper Ltd. has been active in Ghatshila with its Indian Copper Complex, which is now also the only producer of nickel in India.

Apatite

With 7 million tonnes of apatite rock, Jharkhand holds 27 percent of India’s apatite reserves.9 The mineral is used in fertilizer and occasionally as a gemstone. Most of the the state’s apatite is found in West Singhbhum.

Other minerals found in abundance in Jharkhand include uranium, chromite, bauxite, limestone, manganese, graphite, phosphorite and quartz.

Investment opportunities in Jharkhand’s mines

The mining process begins with exploration and culminates in a final product reaching the market. Jharkhand provides opportunities for investment across all stages, with equipment manufacturing being a key requirement:

Exploration equipment (augers, drilling rigs)

Exploration vehicles (bulldozers, haul trucks)

Processing and refining equipment (spiral classifiers, plate settlers)

Transport vehicles (dragline and stripping shovel, belt conveyors)

Auto ancillaries

Proposed projects harnessing Jharkhand’s mineral and metallurgical resources include an aluminium park in Muri and Latehar, a steel park in Kharsawan and Jamshedpur and a proposed gems and jewelry park in Ranchi.

Jharkhand ranks fifth in India for foreign direct investment and seventh nationally in terms of the ease of doing business, making it a clear investment destination for mining-related activity.

As one of Asia’s biggest vehicle manufacturing hubs, there are already numerous financial incentives in place for companies – particularly MSMEs – to establish a presence in the state. Policies to promote mining and related activities include simplified clearance of mining lease applications within 60 days.

Jharkhand also has unparalleled transportation and infrastructure to help take the mining sector global – road, air and rail connectivity and port connectivity, land banks and round-the-clock electricity at low rates.

Industrial heavyweights that have already placed faith in Jharkhand’s investment-friendly policies include French cement leader Lafarge, Bihar Sponge Iron Ltd. and JSW Steel Ltd., among others.

Educational institutions that support Jharkhand’s mining industry and help produce the next generation of qualified labour include the Central Mine Planning and Design Institute, the Central Institute of Mining & Fuel Research, the Indian School of Mines and the National Metallurgical Laboratory.

Mining tourism is a concept that’s taken off in other countries with mineral wealth, such as South Africa, Brazil and Japan. It allows recreational use of closed or abandoned mines so tourists can understand the positive impact of mining processes and activities on Jharkhand residents.

Mining tourism also provides a fillip to Jharkhand’s growing sustainable tourism industry by generating jobs and new infrastructure that transcend both sectors.

Source – Bloomberg Quint