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Challenges in India’s mining sector
One of the primary challenges in India’s mining sector is the limited depth of exploration. Most exploration activities are restricted to shallow depths of 50-100 meters, versus up to 300 meters globally, preventing discovery of deeper, high-value mineral deposits and reducing overall resource utilization.
The approval process for mining projects is another major bottleneck. Obtaining necessary permits and environmental clearances can take four to five years, against six months in leading mining economies. This discourages private investment and slows down the pace of mineral extraction.
The tax burden is among the highest in the world at an effective tax rate exceeding 50% of revenue while the global average is 35%-40%. This impacts Indian mining’s competitiveness. Inefficient logistics and inadequate infrastructure further add to the cost of mining operations.
Another pressing concern is environmental sustainability as mining activities often lead to deforestation, water pollution, and biodiversity loss. With increasing regulatory scrutiny and social expectations, mining companies need to adopt more responsible extraction methods and other sustainable mining practices.