The article describes about how Mine Developer and Operator (MDO) service can reduce owner's responsibility of mining in terms of cost reduction, project finance, productivity improvement and overall project management.

1. ffil
LWiGouranga Sen
MINING in lndia has come
to a crucial juncture where
both the mining industry
and the government have
to commit to scientific and
sustainable mining prac-
tices. While the mining
PSUs are struggling to meet
the increased domestic demand because of in-
herent operational inefficiencies and regulatory
hurdles, private mining is facing permitting is-
sues, land acquisition challenges, financing is-
sues and inexperience. Under such circum-
stances the services of specialist Mine
Developers and 0perators (MDO) would be the
long-term solution for lndian mining industry.
Poor Show of Mining Sector
For a country craving for coming back to an 8%
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plus GDP growth on a sustained basis, the eco-
nomic indicators for mining sector are scary. ln-
dia's mining industry growth rate has turned
negative to -1.4o/o in FY2013-14 from 6.5%
FY2010-11. lndustry's share in the national
economy has also come down from 2.3%
(FY201 0-201 I ) to 1 S% (FY2013-201 ).The ban
on iron ore and manganese mining in the major
producing states like Karnataka, Gca and
0disha has been the root cause.
lndia's minerals trade has also deteriorated,
particularly for bulk commodities like iron ore
and coal. lndia, in spite of being the fourth
largest producer of iron ore in the world, is turn-
ing out to be a major importer of iron ore this
year. 0ur research shows that lndia has already
imported around 5.7 mt during AprOct'14
while exports have dwindled to just 3 mt dur-
ing this period making lndia a net importer of
iron ore first time in recent history. india's coal
import has also increased to an alltime high of
1 75 mt in FY201 3-1 4. lncreased import of coal
and decreased exporl of ironore have been ad-
versely impacting the national exchequer and
worsening the country's current account deficit
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23

2. (CAD). At the grass root level, statutory mine
closures have forced large-scale layoffs in the
industry. This has also affected the local allied
services industries like transportation and min-
eral processing.
Root Causes of the poor Show
The root of the problem lies in lndia,s archaic
mining practice. Fragmented and unscientific
mining, with scant regard to the principles of
sustainable development and mineral conser-
vation have invited the wrath of lndia,s judiciary
for the last few years. lndial application of min-
erals codg unfortunately, also supports these
unscientific practices. Statutes like Rule 37 and
38 are primitive and their interpretations are
grossly illogical,Adding to the woes ofthe indus-
try is the unhealthy competition between the
captive users and merchant miners.
Many mining projects in lndia failed to take
off or turned un-profitable due to inexperience
in mining. At the operational level, significant
lead times in equipment procurement, short-
age of skilled manpower, inaccurate assess-
ment of development and mining costs, safety
risks during development and operational
I50
phases of mining and mining financing chal-
lenges are impacting both the aspiring and ex-
perienced miners.
Modern mining is a highly specialised opera-
tion and business.A sustainable mining industry
and an associated supply chain demand invest-
ment in specialised infrastructure development.
Moreover, many mining projects got crippled
due to problems of land acquisition, forest and
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environmental clearances and Resettlement
and Rehabilitation (R&R) issues for project af-
fected people. 0n the operational parameters,
significant lead times in equipment procure-
ment, shortage ofskilled manpower to operate
and supportthe equipment fleet and mine oper-
ations, inaccurate assessment of development
and mining costs, poor monitoring mechanisms,
managing the safety risks during development
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3. and operation phases of mining and problems of
financing also poised major challenges not only
to the aspiring miners but also to the hard core
seasoned miners.
MDO-the Way Forward
This is where super specialised services of Mine
Developers and 0perators (MD0) are required.
MDOs are mining specialists who operate on
behalf ofthe mine owner against a fixed charge
on a long-term basis.Apartfrom initial funding,
they also invest in technology for exploration of
hidden mineral resource, innovative mining
technology, specialised technologies for mining
optimisation in low grade deposits, benefica-
tion and metallurgical innovations, investments
in innovative infrastructure solutions, community
relationship management and best work prac-
tices in sustainable development.
The MDO model is a proven model in the
mining oriented countries like Australia and ln-
donesia. Even in lndia, the need of MDO has
been recognised by the government and public
sector enterprises like state owned power gener
ation companies and some subsidiaries of Coal
lndia Ltd have been carrying out mining opera-
tions through MDOs. MD0 brings the follow-
ing benefits to mining.
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O Assured production in quantityand quality,
allowing mine owners to focus on developing
end-use projects.
O MD0s may finance the mine start-up costt
freeing large capital, which tbe mine owner can
utilise in downstream projects.
O MDOs guarantee production and delivery ol
mineral at a fixed pricgallowing cost controlto
the mine owner.
o MDOs bring operational excellence and ad-
vanced technology to mining and correspon-
ding cost optimisation.
O MD0s also provide mineral exploration serv-
ices including resource assessment and mine
planning, allowing mine owners to get an end-
to-end solution for their mining projects.
O As the MDOs specialise in critical activities
like maintaining expensive equipment, inven-
tories and staff training, even many well-estab-
lished large mining companies outsource their
development and operation to MDOs.
Appointment of MDOs in mining operations
can substantially reduce many mining chal-
lenges and increase mineral production in an
efficient, scientific and sustainable way.
About Geovale Thriveni Mining Services
Geovale Services and Thriveni Earthmovers pri-
vate Limited have joined hands to create Geo-
valelhriveni Mining Services to provide a compre-
hensive and world-class MDO services and
solutions in the entire value spectrum ofthe ex-
ploration and mining industry. ln ourglobaloper-
ations,with complementary skills and experi-
ence, we provide services in conceptualising,
designing and managing projects at exploration,
pre-feasibility and feasibility studiel statutory
services, mine development and operation, min-
ing logistics and infrastructure to mine closure.
While Geovale Services is a team of highly
skilled resource professionals with significant
global experience in managing exploration and
mining projects, Thriveni Earthmovers private
Limited is one of the largest Mine Developer
and Operator (MD0) from lndia operating for
more than two decades in different parts of ln-
dia and internationally.We provide end-to-end
solutions and our service range include geolog-
ical exploration, resource modelling, mine plan-
ning, pre-feasibility & feasibility studies, min-
eral market analytics, due diligence, mine
development & operation services, mineral pro-
cessing, mining logistics & infrastructure and
statutory services.
At the lnternational Mining and Machinery
Exhibition (IMME 2014) at Kolkata, you can in-
teract with our technical team at stall no. 1 36
at hangar B during December 3-6,2014. More in-
formation is available on our websites-
www.geovale. com and www.thriven i. com.
-Th
e author is a pri ncipal a na lyst,
Geovale Services
DECEi/BER 20141'urr mo
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