An Introduction to Mineral Economics & Role of Geologist

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An Introduction to Mineral Economics & Role of Geologist

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An Introduction to Mineral Economics &
Role of Geologist
Dr. P.K. Jain
Chief Mineral Economist
Indian Bureau of Mines
22nd June, 2020
e-Training on “Basic course on Resource Estimation for Mineral Deposits”
RTD, GSI, CR, Nagpur
Disclaimer
The views expressed in this presentation are the author own and not necessarily those of the organization for whom
he is working.

•Mineral Economics –branch of Applied
Economics
•Mineral Economics deals with minerals.
•It deals with the application of economic
principles to the various aspects of mineral
industry.
•Problems of minerals require different approach.
•Specialties to make approach to analysis of facts
and problems pertaining to minerals.
Contd.
Mineral Economics

Mineral Economics
•Mineral Economics is the academic discipline that
investigates and promotes understanding of economic and
policy issues associated with the production and use of
mineral commodities
•It emerged as a separate academic field only after World
War II
•In the decades following World War II, after early fears of
a new depression and excess capacity evaporated, mineral
economics focused on the long-run availability of
nonrenewable commodities and the threat of supply
interruptions for strategic and critical minerals from the
Middle East, the Soviet Union, and southern Africa,
concerns that persisted at least through the 1980s.

Mineral Economics v/s Pure Economics
Generally it was referred as a branch of Economics but in reality
the specialties associated with minerals & mineral deposits make
‘Mineral Economics’ a very complex subject - quite apart from
pure economics
Specialties are:-
– indispensability to survival of mankind
– finiteness & non-renewability
– hidden occurrence underground uncertainties of quality,
quantity, usability hence need for prospecting/exploration
– unique to mineral resources
–independence of political boundaries
–location beyond human control
–long gestation period
–foundation of all economic activities directly or indirectly

Mineral Economics Education in world
1. In USA, started as an organised discipline of USBM in early 1920’s - just as in IBM in the
1950’s.
2. In 10 years, in 1932, Pennsylvania State University, USA introduced a nucleus set-up for
research in the field of Mineral Economics.
3. In 1940, curriculum in Mineral Economics introduced in that university to offer academic
degree.
4. In 1946, its School of Mineral Industries (now the College of Earth and Mineral Sciences)
created a Department of Economics and began awarding B.S., M.S., and Ph.D. degree in
field.
5. In 1968, in Colorado School of Mines, a separate department created.
6. In 1970’s, W. Virginia University of USA, University of Arizona & Michigan
Technological University also introduced degree-granting programs at graduate level.
7. Stanford, Columbia, McGill University of Canada and Queens followed suit.
8. Curtin University of Technology in Australia, the University of the Witwatersrand in South
Africa, the Catholic University of Chile –most of these programs have been initiated in
1993 .
9. Dundee in Scotland offer a program in mineral law with a focus on mineral economics.
10. Government agencies like IBM, Natural Resources Canada, the Australian Bureau of
Agriculture and Resources (ABARE) & Chilean Copper Commission (Cochilco) today
support a wide agenda of research in the field.

Mineral Economics education in India
1. No formal education.
2. Only a full or part paper in Post Graduate Applied Geology or
B.Tech. Mining Engineering or MA (Economics).
3. Mineral Economists of IBM are only Geologists & Mining
Engineers by education who have acquired on-the-job
working experience in the field of mineral economics.
4. In sharp contrast to many other countries.
5. Specialised academic centers for regular study/research in
Agricultural Economics, Environmental Economics exist.
6. Unlike in cases related to agriculture and environment,
country is deprived of institutional back-up research on
problems related to mineral sector.

The objective of the IBM is to promote systematic and scientific
development and optimum utilisation of mineral resources of the
country (both on-shore and off-shore). In order to achieve this
objective the charter of functions of Indian Bureau of Mines is as
follows:
•To collect, collate and organise into a database, all information on
exploration, prospecting, mines and minerals in the country in the
shape of a National Mineral Information Repository and take steps to
publish and disseminate the same;
•Function as the National Technical Regulator in respect of the
mining sector and lay down regulations, procedures and systems to
guide the State Governments (first tier of regulation);
•To build up capacity in the system, both for regulatory as well as the
developmental work, at the central level as well as at the level of the
States;
Objective and Charter Functions of
Indian Bureau of Mines

•To establish institutional mechanisms of coordination between the
Centre, the States, mineral industry, research and academic institutions,
and all stake holders, so as to proactively develop solutions to the
demands and problems faced by the industry;
•To promote research on all aspects of practical relevance to the industry
and to act as a bridge between research institutions on the one hand and
user industry on the other;
•To provide technical consultancy services;
•To participate in international collaborative projects in the area of
regulation and development of the mineral sector;
•To advise Government on all matters relating to the mineral industry;
and
•To undertake any such other activity as has become necessary in the
light of developments in the field of geology, mining, mineral
beneficiation and the environment
Objective and Charter Functions of
Indian Bureau of Mines

Functions of Mineral Economics Division
at Indian Bureau of Mines
Functions of Mineral Economics Division in IBM are :
a) National Mineral Inventory (NMI)
b) Indian Mineral Yearbook
c) Market Survey Reports of Minerals & Metals
d) Non-Ferrous Metal Consumption (Copper, Lead & Zinc)
e) Mining Lease Directory
f) Bulletin of Mineral Information
g) World Mineral Intelligence
h) Mineral Information & Advisory Services
i) Mineral legislation, Trade, International cooperation

National Mineral Inventory

NATIONAL MINERAL INVENTORY (NMI)
•Quinquennial updation of inventories of mineral resources in the
country, covering mineral deposits in leasehold and freehold areas.
•The NMI is fully computerized and the requisite information is
available to interested persons/agencies on charge basis.
•NMI in its present form covers - location of Mineral deposits/lease,
nature of land, infrastructure, geology, exploration, physical and
chemical properties, beneficiation, resources, reserves, status of
freehold/leasehold, etc. along with the primary source of
information.
•Classification of quantities as per their end-use grade were
accommodated.
•The United Nations Framework Classification (UNFC), has been
introduced successfully in the NMI since 01-04-2000.
•At present, updation of “NMI as on 01.04.2015” is successfully
completed .

NATIONAL MINERAL INVENTORY (NMI)
71 Minerals
Free Hold Deposits
(About 8,252 deposits)
Deposits Total 20,000 deposits
(approx.)
Districts
States & U.T.
All India Mineral Inventory
Lease Hold Deposits
(About 11,792 deposits)
Blocks About 200 field parameters
for each block

Indian Mineral Yearbook
Indian Minerals Year Book" (IMYB) depicts
entire "gamut" of minerals and mineral based
industries of India. It has over about last 50
years.
Preparation of IMYB involves correspondence
for obtaining data/information on non-statutory
basis from nearly 3000 parties engaged in mineral
industries including State Directorates of Mines
& Geology, R&D Institutions, Mineral Producers,
Users, Traders, etc.
The data received are analysed and based on this
data, consumption tables are prepared.
IMYB provides a status report of Mining and
Mineral Industry in India on an annual basis as
per Rule 45 of MCDR 2017. This publication has
wide readership- both National and International.

INDIAN MINERALS YEARBOOK (IMYB)
1. Introduction
2. Resources
3. Exploration and Development
4. Mineral Inventory
5. Production & Stocks
6. Grade Analysis
7. Employment
8. Producers of Minerals/ Metals
9. Mining & Milling Process
10. Recycling
11. Consumption/ End Use Pattern
12. Substitute/Technical Possibilities
13. Policy & Standards
14. World Review
15. Foreign Trade
16. Future Outlook
IMYB consists of three volumes,
Volume-I consist of General Review and State Reviews,
Volume –II consist of Metals & Alloys Reviews
Volume-III consist of Mineral Reviews

Market Survey

Contents of Market Survey
•Chapter 1 Introduction
•Chapter 2 Uses & Speci)cations
•Chapter 3 Supply
•Chapter 4 Foreign Trade
•Chapter 5 Prices
•Chapter 6 Demand & Supply
•Chapter 7 Summary
List of Annexure
List of Figures

Bulletin of Mineral Information
•The Bulletin of Mineral Information (BMI) is a Half
Yearly Bulletin of Mineral Information in respect of
returns and notices on grant of mining leases/prospecting
licences, execution deeds, abstracts, renewal, amendments,
revocation, surrender/determination etc. as per Rule 59(2)
of MCR,2016.
•Besides, mine owners send notices in prescribed proforma
/returns.
•Copies of PL / ML orders relating to approval / inclusion
of additional mineral in the existing leases are received
from the Central Government.
BMI Contents
•Tables on trend in Mining & Prospecting licences.
•Information on production of mineral based products.
•Highlights of minerals & mining activities in domestic &
abroad.

I Section-I
Abstracts of Notifications and court cases related to
mines & minerals.
Section-II
Information in the form of letters, returns and
notices for grant of mining leases, its execution,
lapse, extension of period, execution deeds,
revocation, surrender, determination, transfer,
opening, discontinue, re-open, abandon, grant of
PL, its execution, renewal, revocation, etc. and
trend of RP’s.
Section-III
Information on production of mineral based
products.
Section-IV
Highlights of domestic and abroad news.
Bulletin
of
Mineral
Information
( BMI )

Bulletin of Mining Leases & Prospecting Licences
•The data received from respective state
governments as per Rule 59(2) of Mineral
Concession Rule 2016 used to prepare mining lease
directory and other required data generation.
•ML Directory provides comprehensive overview of
a mining lease like its location, lessee’s name and
address, area, date of grant, execution, period of
lease etc.
•40 Minerals covered for mining lease information
after 31 minerals notified as minor minerals w.e.f.
10.02.2015.
•There are 3,529 leases have been granted by state
governments as on 31.03.2019 which covered
3,16,290 hectare area.
•31 minerals which are declared as minor minerals
having 6000 leases (approx.).

World Mineral Intelligience (WMI)
•Mineral Economics Division processes and maintain updated
information on mineral reserves from USGS source and production
data from BGS source for 60 minerals.
•Maintain updated information on trade data from DGCI&S Kolkata
source of different countries.
•This information is essential to India keeping in view to assist
government for bilateral co-operation treaty / agreement with
different countries under global liberalized economic scenario.
•Technology innovation, discovery of new deposits, its potentiality,
international trade in minerals, global economy and international
prices of minerals & metals can effect India’s import or export trade
and interest in mineral sector of other countries of world.
•Constant watch over world wide developments in mineral sector is
required for proper utilization and long term planning of Indian
mineral resources towards self sufficiency.

MINERAL LEGISLATION UNIT

ACTIVITIES
1. Renders advisory services to the Central Government i.e Ministry of Mines /State
Governments and private parties and/individual in respect of matter related to
mines/mineral sector; matter related to MMDR Act 1957 and rule made there under,
export/import policy, duty structure, mineral royalty, national mineral policy etc.
2. Parliament Questions/Ministry References/State Governments/ Private References
regarding legislation and policy related to mineral sector.
3. Data Collection on accrual of mineral royalty & NMET from states through respective
nodal officers/State Govts. and its endorsement to NMET Secretariat, New Delhi
periodically/as and when received.
4. Work related to information for Bulletin of Mineral Information (Half Yearly
Publication of IBM, Section-1) covering abstracts pertaining to decisions of the Supreme
Court/High courts on cases relating to Indian Mineral Legislation/ Laws and changes in
trade policy, customs duties, and Notifications related to mines and minerals, etc. are
documented and published.
5. Assist the Study Group constituted by Ministry of Mines to amend the Second Schedule to
MMDR Act,1957.

Mineral Information & Advisory Service
Provides mineral related information including
reserves/resources, exploration, production, consumption,
exports/imports of minerals/metals; mineral based industries;
mining leases; prices; etc. to the central/state government,
government agencies and individuals.
Advise to the government on different mineral related issues
and examines the problems and policy issues for rendering
comments to the Govt. from time to time.
Provides information as and when required for Ministry
references, Parliament Questions and also render assistance
to Central and State Governments public and private
agencies from time to time.
Prepares talking points/notes on minerals & other issues
related thereto, keynote address/draft speeches/technical
papers as and when required by the Hon’ble Minister,
Secretary and Head of the Department.

Central Library
•IBM’s library at the headquarters has rich collection
of books, journals, published and unpublished
reports of IBM and GSI, Annual Reports of various
Ministries, organizations, Industrial houses, etc.
•Mainly connected with mining and allied subjects.
•The number of periodicals received on the
subscription as well as exchange/ complimentary
basis was 175 including 30 foreign periodicals. For
the benefit of the users, library compiles subject wise
bibliographies, which have been computerized.
•Besides, it helps readers by providing Xeroxing
services and information of reference enquiries.

Publication Section
•The Publication Section is an important wing of IBM that publishes Technical
Publications and undertakes the works of dissemination of information for the
Bureau to all external Academic, Scientific and Government bodies. Located
at IBM’s Headquarters, the Publication Section is a composite organ that
comprises Editorial, DTP, Production, Printing Press, Binding and Sales &
Distribution Units.
•All technical publications at IBM are routed through definitive stages of
publication process from editorial scrutiny, formatting & composing,
production & plate making, to the final stage of printing & binding, which are
undertaken under the single roof of Publication Section, before being finally
released for distribution.
•An approximate total of 30 publications including IBM’s flagship publication
“Indian Minerals Yearbook” are brought out every year.
•The Publication Section handles complimentary distribution & sales work of
all publications.
•A total of 3000 complimentary copies of IBM publications get distributed to
an approximate 200 enlisted addresses (Indian & Foreign) in the Mailing List
every year and an approximate of Rs. 7 lakhs gets generated as sales revenue
every year.

Data base
The following four databases were established in Mineral
Economics Division
Sr.
No.
Title Details
1. National Mineral Inventory
(NMI)
information on mineral
resources
2. Mineral Consumption (MC) information on mineral
consumption by the end user
3. Mining Leases (ML) Information on mining leases
of the country
4. World Mineral Intelligence
(WMI)
Information on world
mineral resources and
production

Mineral Economics division is to collect,
collate, analyze various mineral related data
and processing the same for dissemination
to the industry, policymaker and all stake
holders concerned with mineral/ mining
activities in country and abroad.
Backbone of ME Division is STRONG
DATABASE
Data base

Flow Chart to Prepare the database
Data
Inflow
Data
Collate
Data
Analyze
Data
Processing & Dissemination
Data inflow: as per time schedule, in specified format,
credible and complete.
Data Collate: tabulation, synthesis, Data entry,
physical verification etc
Data Analyze: Validation, processing etc
Data Outflow in the form of publications,
references, policy etc.

Utilisation of Mineral Economics Division
1. Inter-ministry, Intra Ministry & Niti Aayog references regarding
minerals, mineral based industries is dealt.
2. Parliament Questions based on mining and minerals is dealt.
3. Mineral Policy and policies of other ministries like Steel, Labour,
Commerce & Industry, Employment, Foreign Trade Policy, etc.
and examines the problems and policy issues for rendering
comments to the Government from time to time.
4. Offering comments on Court cases related to mining and mineral
legislation.
5. provides a status report of Mining and Mineral Industry in India on
an annual basis through Indian Bureau of Mines
6. Analysis and determine the future availability of minerals to end
use industries through National Mineral Inventory.

Future Aspect & Vision of Mineral Economics
•Mining Tenements system(MTS) has been conceptualized by the ministry of
mines, wherein Indian Bureau of Mines (IBM), is the nodal agency for
executing this system.
•MTS primarily involves automating the entire mineral concession life-cycle,
starting from identification of area and ending with closure of the mine; and
connecting the various stakeholders for real-time transfer of electronic files
and exchange of data. This shall enable effective management of mineral
concession regime and transparency in mining operations.
•Process for selection of a implementation agency for design, development,
maintenance and operation of mining tenements system has been completed
and contract signed on 10th November,2016 with selected agency i.e. M/s
Wipro Ltd.
•All the data related to current database will be automatically fetched up after
implementation of MTS.
•The output of NMI database, ML-PL data base and consumption of minerals
database will be real time as on date.

Flow Chart for database after
implementation of MTS
Data Enter
at Source
Physical
verification
Data
Analyze
Data
Processing & Dissemination
Data entered at source as per time schedule, in
specified format, credible and complete.
Physical verification
Data Analyze: Validation, processing etc
Data Outflow in the form of publications,
references, policy etc.

National Mineral Information Repository
State
Governments
MECL & other exploration
agencies
GSI
Mineral
Industri
es
Indian Bureau of
Mines
Ministry of
Mines Royalty,
NMET,
DMF data

cme@ibm.gov.in
Ibm.gov.in