MUMBAI | May 26, 2017: The beleaguered mining industry is banking on “disruptive innovation” to achieve the government's vision of selfsufficiency and this burden lies on the companies, according to a survey by the University of Western Australia and global consulting firm VCI.
Environmental pressures still weigh on minds of Indian miners more than their global peers but 93% of Indian mining leaders believe that innovation is critical for long-term business strategy and success as compared with 62% in Australia and 59% in the US, the survey said.
Mining accounts for about 2.5% of India’s GDP. The sector has been struggling with problems relating to environmental and forest clearance approvals, opposition from local communities and land acquisition, which has impeded growth. Prime Minister Narendra Modi-led NDA government is now seeking to attract investors to this sector to scale up domestic production.
Innovation State of Play, a platform created by international consultant VCI and University of Western Australia, conducted a survey of miners across the globe.
The India report, titled ‘How can India unleash its potential to become a world mining superpower’, compiles views from 50 mining leaders of India’s top nine mining firms including Adani Group, Coal India, Jindal Steel and Power, Tata Steel and Vedanta Resources.
“To achieve the government’s vision of self-sufficiency, it cannot just catch up to the rest – it must disrupt the whole industry,” said the report. Quoting a CEO anonymously, it adds, “India has to leapfrog. Fifty years of evolution has to happen in five.
Everyone in India talks about disruption, not innovation. It spills off the lips of the PM, the ministers…no one talks about job creation”.
In the last two years, the Indian government has undertaken reforms and policy changes to make mining more transparent.
Almost all pending mining and exploration concessions were made open to reapplication and all undeveloped blocks were taken back by the government and consolidated from previous disparate and less economic blocks.
The government now auctions these mines through a more transparent process and hopes to attract investors from India and abroad.
The report quotes another CEO, “the steps they took were right – to inject transparency. There were some mistakes, but they were well intentioned”.
But there are many suggesting that the government’s approach “has killed necessary exploration investment”, but the government counters that it has and will “rapidly tweak its process until the necessary investment is achieved”.
Rapidly refining regulations is not something ‘traditional miners’ are comfortable with but if it works, it can have far reaching effects.
“This focus on transparency has limited the government’s attention on innovation, as it ‘focuses all of its current reforms on cleaning up the mining industry before it looks to facilitate further investment in technology or innovation in the industry’.
In this sense, the burden of innovation has fallen squarely on the shoulders of the private companies. It appears that these companies are accepting the responsibility with relish,” the report said.
(Source: http://economictimes.indiatimes.com)