Mining Bans – The Domino effect on Economy

One of the recurrent themes in our blogs is the primacy of the mineral mining industry to other industries and thereby to the economy. When a crisis hits the mining of these prized minerals, it has a domino effect on several other industries. This is why it is of absolute importance that we take the mining industry and its problems seriously. And this is also why, even at the cost of becoming boringly repetitious, we have been relentlessly hitting the hammer to drive home this point. Now let’s take the Government’s ban on mining beach minerals. An exploration of each of the beach minerals, the industries they are used in and the negative impact that their low supply would have on these dependents would demonstrate the domino effect clearly.


Ilmenite is the primary ore of Titanium and is used to make Titanium dioxide, a white pigment that is an important raw material for the Paint industry. Titanium dioxide is also used in the manufacture of toothpastes, adhesives, plastics, and cosmetics. But the major sufferer of the ilmenite ban is the paint industry, particularly the small and mid-sized manufacturers. Though the paint industry has a huge potential to grow, the major setback it is facing right now is the cost of raw materials. With the ban on mining ilmenite, the cost of the crucial raw material of Titanium-dioxide has shot up and manufacturers have been forced to shell out more for imports.  The paint industry is highly cost- sensitive and continued dependence on imports will push small players out of the market.


Among the many uses of Rutile, one of the most important is its use in the manufacture of welding electrodes. The Indian welding consumables market is worth nearly INR 45 Billion. And welding electrodes, in turn, have applications across different industries like oil and gas, marine, power generation, construction and building, transportation and automobile. Welding electrodes are linked to the high steel usage of most of these industries. With the growth of power and automobile industries, this industry is looking at a phenomenal growth.  But as with the paint industry, there are negative factors blotting the positive future predicted for the welding electrode manufacturers. A report on the industry by Transparency Market Research reveals that the biggest challenge that the welding consumables industry faces today apart from close competition from foreign players is the fluctuating raw material supply.


Garnet is used in making abrasives that are used in sand-blasting, water Jet cutting, water filtration and surface preparation. Water jet cutters are used in the fabrication of machine parts and are indispensable tools for various industries including metal mining, aerospace, automotive, electronics, food, fiber glass, and textiles. Sand-blasting is used widely in art, in refurbishing buildings, cleaning industrial and commercial structures. Short supply of Garnet would make a dent in the normal functioning of all these industries.


Zircon is a mineral that is a key ingredient in the manufacture of Ceramics. The heat resistance and rigidity of Ceramic are determined by the quality and quantity of Zircon used. And as we know Ceramic has wide applications in the manufacture of ceramic tiles,  precision casting, fuel cells, nuclear power generation, medical prosthetics, food processing and pharmaceuticals. Price differentials observed in Zircon, because of the ban and imports would hit Indian Ceramic tile manufacturers’ position as No 3 in the world market.


Sillimanite mineral with its high heat resistant property is used in making refractory bricks and mortars used in the manufacture of metals, glass, ceramics, and cement. But the major consumer of sillimanite is the Iron and steel industry which uses up more than 60 % of refractories produced. And the importance of Iron and steel industry to other industries and the economy as a whole cannot be overstated.

The gravity of the ill-planned ban on mineral mining hits you harder with increasing knowledge of how these minerals are used up, and form an integral part of the demand and supply chain of other industries. In some industries like the Paint industry, we have already started feeling the tremors. Others like aerospace and automobiles are a little farther away and it is a matter of time before the ripples slowly and imperceptibly begin to erode profits. Matt Bevin rightly observes that, while it may seem small, the ripple effects of small things are extraordinary. By ignoring the ripples now, the Government is setting India up for an extraordinary economic calamity in the future.

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