With the Union Government having introduced several reforms to boost Ease of Doing Business in the mining sector Exploration of Mineral blocks have been facilitated to aid auction of blocks to investors and the sector has been made more competitive in order to increase the production of minerals by 200% in 7 years.
The MMDR (Mines and Minerals development and regulation) Act had been subsequently amended in 2016, 2020 and in 2021 with the objective to boost mineral production, increase revenue earnings of State Governments, generation of employment & improve ease of doing business etc. Since the amendment to MMDR Act, 1957 in 2015, 206 mineral blocks have been auctioned so far, across 10 States.
‘AP has started taking the benefit from whatever thrust GoI is giving in exploration and auctions’ said Mr Gopal Krishna Dwivedi, IAS, Principal Secretary to Government of Andhra Pradesh speaking at a recent National mines minister’s conference in Hyderabad.
Giving a presentation Mr Dwivedi informed the gathering the state of Andhra Pradesh ranks amongst the top Indian states for establishment of Mineral Based Industries.
Highlighting that the state ranks 1st in the production of Barytes, Dolomite and Silica Sand, No 2 in Quartz & Granite and No 4th in Limestone he said that GoAP has laid specific focus on exploration of major and minor minerals areas to continue the pipeline of blocks to be auctioned in order to realize the true potential of the state.
It was informed that a total of 46 areas have been explored in AP since 2019-20 wherein 33 of them were explored just in 2020-21 itself. Similarly for the current fiscal the state has already explored 7. ‘We hope to do another 10-15 more this fiscal’ said Mr Dwivedi. Private agencies have also been approved for explorations and of the 7 areas explored this fiscal 2 were done by private agencies.
As per Mr Dwivedi a total of 29,449 hectares were explored in FY 22 which included 11 blocks of manganese, 10 blocks of gold, 5 blocks of limestone and 5 blocks of iron ore. This in comparison to FY 21 was just 3996 hectares across 4 blocks and a mere 312 hectares across 2 blocks in FY 20.
Some of the major minerals being explored include Limestone, Manganese, iron ore, gold, diamond.
The state government had auctioned 21 blocks in FY22 of which 18 were CL (coal) blocks and 3 were ML (minerals) blocks. And for this fiscal i.e. FY 23 it has already auctioned 11 CL blocks.
AP Mineral Revenue
Andhra Pradesh’s mineral revenue has been growing steadily from Rs 1702 crores in 2016-17 to Rs 3765 crores in 2021-22 (see bar graph). The revenue from minor minerals has been a majority contributor to these revenues. For instance in 2016-17 minor minerals contributed Rs 1102 crores of the total 1702 crores. Similarly for FY 22 minor minerals contribution stood at Rs 2438 crores of the total Rs 3765 crores.
‘The government this year is targeting a revenue of Rs 5000 crores’ said Mr Dwivedi of which minor minerals are expected to contribute a whopping Rs 3890 crores.
Ease of Doing Business in AP’s Mining & Exploration
Speaking on the ease of doing business parameters in this sector the principal secretary informed that the state government has undertaken numerous steps to make the process clear of any corruption. Some of these steps include an automated E-permit system i.e. an online platform to issue automated e-permits thereby negating any human intervention. Similarly a single desk portal is there for filing applications, an online platform for real time surveillance of mineral carrying vehicles and also an end-end IT based regulatory mechanism for overall mineral movement.
Seeking GoI Support
Seeking support from the government of India the state government has called for the relaxation of area limits for heavy minerals beach sands.
GoAP has identified 16 beach sand minerals (BSM) bearing areas over an extent of 16,604 hectares. ‘Considering this large extent of area GoAP has requested to relax/increase the extents as permitted by MMDR act 1957 ‘informed Mr Dwivedi. In addition it has also asked for relaxing restrictions on grant of BSM lease to private entities.
Revision of Royalty
The state government also asked the government of India for a revision of royalty for major minerals and has asked for an increase in royalty especially for limestone. AP’s Minister for Energy, forest, environment, Science & Technology, Mines and Geology Mr Pedireddy Ramachandra Reddy, also attended the conference.