Amid supply chain issues, India's strategic mining in critical state
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India's mining sector remains underdeveloped due to high import dependence and severe execution bottlenecks. Challenges include land acquisition difficulties, uncoordinated state-level regulations, and environmental concerns related to mining activities. The Centre has urged states to improve the operationalisation of mines, with only a fraction currently active. Various stages of clearances have delayed the progress of numerous mining projects in different regions.
New Delhi: Amid global race for critical minerals and China-linked supply chain constraints, India is unable to operationalise the bulk of its mines.India is faced with extreme dependencies, import reliance and weighed down by 'critical ground-level execution bottlenecks', the latest sectoral reviews shared by the coal & mines ministries with states have stated, urging 'mission mode' coordination to bolster energy security and economic growth.
On critical and strategic minerals, concept notes shared ahead of the 6th national conference of chief secretaries state that 'extreme domestic supply-chain vulnerabilities persist due to high import reliance and nascent deep-drilling technologies'. The Centre has strongly urged states to develop a framework for extraction of beach sand minerals like monazite to make rare earth elements available for new-age industries.
A total of 733 blocks of different minerals has been auctioned by different states but 'only 125 of them are in operation as of August 2026', with the remaining mines stuck at 'various stages of clearances', the Centre pointed out, ET has learnt.
Award-to-production interval 'exceeds seven years' for major and critical mineral blocks amid 'regulatory complexities' and clearance requirements. Much is at stake as energy security needs apart, the mining sector contributes over ₹1.9 lakh crore annually to government exchequers and 90% of this directly accrues to states.
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The Centre has prescribed strong Centre-state coordination and adoption of a 'complete value chain approach', including an 'integrated resource-to-revenue, blocks auctioned to mines operationalised, and waste-to-wealth framework', riding on clean technologies, ET has learnt. In the way are nine levels of challenges.
Critical to minor extraction
While India produces over 95 minerals as well as critical minerals like lithium and cobalt, bottlenecks are holding back the pace. If critical minerals are facing challenges, mainly related to China-linked high supply chain and technology dependencies, minor mineral extraction is constrained due to the absence of clear mineral-specific exploration norms and the lack of standardised, GIS-enabled State Mineral Inventories, leading to 'unscientific quarry block mapping' and 'localised environmental degradation', the concept notes say. Further, as near-surface mineral deposits deplete, one needs to access deep-seated and structurally complex mineral systems covered by regolith, basalt or heavy sediments, posing a serious financial and technological challenge.
According to the concept notes, domestic unavailability of commercially demonstrated technology, high capital costs of bringing in advanced technology, risk aversion among investors and limited domestic processing capacity for high purity strategic elements are the main challenges.
UNEASE OF MINING
Land acquisition remains the single largest 'critical-path dependency'. Roadblocks across states include fragmented land records, disputed title, complex compensation assessments, physical possession resistance and rehabilitation-resettlement hurdles.
The absence of pre-identified state land banks for compensatory afforestation stalling forest clearance proposals.
There are also law and order issues that periodically halt mine exploration and mineral despatch. Illegal extraction of sand and stone not only causes severe riverbed degradation but also substantial royalty leakages.
There are a 'plethora of uncoordinated state-level cesses', overlapping levies, multiple sequential approvals across various departments and complex regulatory compliances, the Centre has pointed out.
For minor minerals, varying state concession rules, lack of single-window portals and delayed district survey reports create administrative friction. Logistics is another sore point and needs to catch up with production amid gaps in first-mile connectivity, dedicated rail sidings, port linkages, stockyards, high-capacity road corridors, besides rationalised transit permit systems, to cut costs and barriers.
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Figures reflect the source report and its stated period. This article is for information and is not investment advice.
