3rd Five Year Plan
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Chapter 27:


In the field of industry the First Plan was primarily one of preparation for large-scale development. It did not, therefore, call for any considerable increase in mineral production, but rather focussed attention on the systematic and detailed investigation of the country's resources of important minerals with a view to assessing more accurately both their quantity and quality, and on the adoption of measures to ensure that they would not be recklessly squandered. Although the country had already been surveyed geologically in a general way and the pricipal mineral regions ascertained, the exploration of mineral resources had, in most cases, not been thorough or complete and estimates of reserves were very rough approximations. The establishment of the Indian Bureau of Mines in 1948 and the expansion of the Geological Survey of India, agreed to in January, 1951, paved the way for fuller and more .systematic investigations and greater attention to measures of conservation. These began to bear fruits during the Second Plan and in the past few years the output of certain minerals, e.g., coal, iron ore and bauxite has increased substantially.

2. The progress made in different fields during the last ten years is briefly reviewed in the following paragraphs.


3. Production.—The First Five Year Plan did not contain any specific programme for coal production—the order of increase in demand was such as could be met by the capacity already established. On the basis of the coal requirements of the industrial and power programmes envisaged in the Second Plan and the traffic expected to be carried by the railways, a production target of 50 million tons was set for coal in the last year of the Second Plan. This meant an increase of 22 million tons over the level of production reached in 1955. The order of increase was such as could not be met merely by expansion of production from existing collieries; it required also the opening of new mines. Having regard to the capacity of the existing collieries to increase production and also to the policy of the Government, which reserved the establishment of new units to the public sector, 12 million tons of additional production were allocated to the public sector—2 million tons from existing collieries and 10 million tons from new collieries to be established in virgin areas—leaving the balance of 10 million tons to be raised by the private sector from their existing collieries and areas immediately contiguous thereto.

4. While the expansion of the production from existing workings in both the public and private sectors did not present any serious difficulty, the establishment of additional production from new collieries made the task of the public sector a formidable one. New mines had to be established in practically virgin areas. Legislation had to be passed to enable the public sector to acquire new areas; and these had to be prospected in detail in order to prove the reserves and to select the blocks to be developed. In addition the public sector had to build up an organisation practically from nothing and there was a serious shortage of experienced technical personnel fitted to hold supervisory posts. This combined with initial difficulties in securing foreign exchange for the programme, resulted in rather slow progress during the early years of the Plan. The production achieved during the Second Plan has, therefore, to be viewed in the context of these difficulties. As against a target of 60 million tons, production during 1960-61 -has been 54.62 million tons. Though the actual production has fallen short of the target, the. public sector, which includes the collieries of the National Coal Development Corporation and the Singareni collieries, has established capacity for achieving a rate of production commensurate with the target set for it. In the last year production from the mines of the National Coal Development Corporation has increased rapidly. It rose from a level equivalent to an annual rate of 5.3 million tons in the first quarter to the equivalent of an annual rate of 13.7 million tons in* the last quarter as compared with a production target for the whole year of 13.5 million tons. The corresponding figures for the Singareni collieries are 2.4 million tons and 2.6 million tons against a production target of 3 million tons and for the private sector 43.8 million tons and 45.7 million tons against a target of 44 million tons.

5. The progress of coal production during the last ten years and the actual fieldwise production during 1960-61, as compared with what was visualised at the beginning of the Second Plan are shown in the following Tables :

Table 1 Coal production

year million tons
1951 34-43
1952 36-30
1953 35-98
1954 36-88
1955 38.23
1956-57 40.30
1957-58 44.10
1958-59 45-94
1959-60 47.82
1960-61 54-62

Table 2 Fieldwise production in 1960-61
(million tons)

fields as envisaged in the pr Second Plan actual production in 1960-61
Assam 0-50 0-68
Darjeeling 0.03 0-04
Raniganj 18-16 18-08
Jharia 16-69 16-09
Karanpura 6-00 4-48
Bokaro 2.88 3.75
Giridih 0.26 0-46
Other small fields in Bihar 0-14 0.15
Chhindwara and Chanda 2-25 3-06
Korba 4-00 0-57
Central India coal-fields 5-31 3.67
Sasti 0-07 0-14
Orissa 0-52 0-88
Singareni 2-93 2-52
Bikaner 0-03 0-05
total 59.77 54-62

It will be seen that the actual production in 1960-61 differs from that originally envisaged specially in the Korba and Central India Coalfields. This was because certain adjustments became necessary as a more clear picture of the factors relevant to the production and distribution of coal emerged. Moreover, the quality of coal from Central India Coalfields was not according to expectations.

6. Conservation.—The following measures have been taken for conserving the limited reserves of coking coal :

(i) Stowing.—with the passing of the Coal Mines (Conservation and Safety) Act, 1952, stowing which was till then compulsory from the point of view of safety was extended to cover conservation.

(ii) Restriction of output.—Ceiling limits were fixed for the production of coking coal, the idea being to reduce output of coking coal to the level of the demand of essential consumers. However, during the Second Plan, owing to the need to increase production to meet the demands of the steel expansion programme, the limits were gradually raised again and now, with the commissioning of the new steel plants and the expansion of the existing ones, the reasons for pegging production have ceased to exist.

(iii) Establishment of washeries.—Washing being one of the measures of conservation, the Second Five-Year Plan provided for additional washing capacity of 6.4 million tons to be achieved by the establishment of four central washeries and the installation of a washing unit as an adjunct to the Durgapur steel plant. The unit in the Durgapur steel plant (capacity 0.8 million tons) and the washery at Kargali (1.6 million tons) have been set up. The other three will be completed only during the early years of the Third Plan. The experience in the Second Plan has been that the preliminaries to the setting up of washeries take a great deal of time. The washability characteristics of coal from different seams and from different collieries have to be studied in order (a) to determine the method of washing and to draw up specifications for the washeries and (b) to select the collieries which should supply each one of the washeries.

(iv) Blending.—The blending of weakly coking or non-coking coal with strongly coking coal will serve to extend the life of the limited reserves of coking coal. The Durgapur steel plant is based On the use of weakly coking or semi-coking coal from the Raniganj coalfield up to 55 per cent blended with coking coal from Jharia.

(v) Substitution of coking coal by non-coking coal.—A phased programme for the substitution of coking coal by non-coking coal on the railways was worked out. However, since the demand for coking coal from essential consumers did not materialise as visualised earlier, the railways continued to use coking coal to the extent that production was surplus to the requirements of essential consumers. The quantum of such surplus, however, decreased from about 5 million tons in 1957 to about 1.5 million tons in 1960.

(vi) Other measures.—Collieries which in the national interest are required to continue in production but which are handicapped by various adverse factors such as gasiness, depth of the workings, etc. are given a special subsidy.

7. Amalgamation of collieries.—Government have accepted in principle the amalgamation of small and uneconomic collieries as recommended by the Committee on Amalgamation of Small Collieries. Pending the passing of legislation for compulsory amalgamation, a Committee to encourage voluntary amalgamation was set up. This Committee has so far approved 31 cases of voluntary amalgamation out of which upto the end of March, 1961, actual amalgamation has taken place in 17. The Committee is still continuing its work. In order that there may be no danger of slowing down the programme for increasing coal production, the introduction of legislation for compulsory amalgamation has been postponed till about the middle of the Third Plan period.


8. There is at present no production of oil within the country except for a small quantity obtained from the Digboi area in Assam. It is, however, expected that an annual production of 2.75 million tons of crude oil will soon be obtained from the Nahorkatiya oil field discovered by the Assam Oil Company. The Government of India's share in Oil India, the Company which has been formed to exploit these oil resources, has recently been raised from one-third to one-half. The crude oil is to be piped to two new refineries which are being built in the public sector at Gauhati (Nunmati) in Assam and Barauni in Bihar with a capacity of 0.57 million ton and 2 million tons respectively. Besides oil, the Nahorkatiya area also contains natural gas. The total quantity likely to be available is not yet known, but arrangements have already been made to utilise some of it for the generation of power, the production of fertilisers and other purposes.

9. The Indo-Stanvac Petroleum Project marked the first major effort at exploring for oil outside the known oil bearing regions of Assam. The Government of India contributed one-fourth of the expenditure incurred on the Standard Vacuum Oil Company's exploration in the West Bengal basin. Several exploratory wells were drilled, but since no oil or gas was located, the company, abandoned the project. Government's share of the expenditure was Rs. 1.67 crores.

10. In view of the great need to establish indigenous sources of oil, the nucleus of an organisation for oil exploration was set up by Government towards the end of the First Plan period. With the limited equipment and technical personnel available, investigations were started in the Jaisalmer area of Rajasthan. The Second Plan provided for an intensification of the effort and enlargement of the organisation therefor. The Oil and Natural Gas Commission was set up, first as a departmental organisation but converted later into a statutory body. The Commission undertook geological surveys, geophysical investigaions and exploratory drilling for oil in Punjab and later in the region of Cambay and in the Brahmaputra valley in Assam. In Punjab no oil or commercially exploitable gas has been discovered in the areas investigated so far; investigations are being continued in other areas of this State. The exploration in Cambay was more successful in that oil was struck' in the very first well. Encouraged by this initial success, a number of wells have been drilled in Cambay and later in the Ankle-shwar area. Oil and/or gas has been met with in many of the wells and though more will have to be drilled before the potentialities of this discovery can be firmly assessed, the indications are that there is a sizeable oilfield in this area. Two wells have been drilled in the Brahmaputra vally in Assam outside the area held under lease by Oil India and one of them has given indications of oil. Geological and geophysical investigations were also extended to the Ganga valley.

The expenditure incurred on oil exploration by Government in the Second Plan has been about Rs. 26 crores.


11. During the ten years 1951-60 there has been a general increase in the volume and value of mineral production. The value of production increased from about Rs. 83 crores in 1950 to about Rs. 159 crores in 1960. The most striking increase is in the case of iron ore which rose from about 2.97 million tons in 1950 to about 10.5 million tons in 1950. This rapid increase is due to the expansion of steel production in the country and the development of export to Japan and other countries. There was not, however, the same steadily rising trend in the production of manganese ore, which is mined mainly for export. Production of manganese ore increased from 0.88 million ton in 1950 to 1.9 million tons in 1953—the spurt in production being largely due to the stockpiling programme of the U.S.A.—but subsequently it has been fluctuating with a general tendency to decline. This is due partly to the curtailment of the stockpiling programme and the recession in the steel industry in U.S.A. during 1958 and partly to the emergence of competitors in the markets for manganese ore.

12. The trends in the volume and value of production of some important minerals are shown in Table No. 3.

Table 3 Trends m volume and value of mineral production
(value in lakhs of rupees) (volume '000 tons)

mineral 1950 1955 I960*
volume value volume value volume value
coal 32310 4668 38230 5603 51810@ 10895
iron ore 2970 154 4680 323 10520 770
manganese ore 880 848 1580 1082 1160 818
limestone 2920+ 103+ 7370 302 12530 562
chromito 17 6 89 27 99 57
  213 33 251 132 246 147
bauxite 64 S 90 9 377 42
magnesite 53 11 52 13 154 27
gypsum 206 14 690 45 982 63
copper ore 360 120 353 258 441 237
lead concentrates 2+ N.A. 3 8 6 22
zinc concentrates 2+ 7+ 5 17 10 25
total value of all minerals including the above   8341   9436   15902


13. With the expansion during the first two Plan periods of the Geological Survey of India and the Indian Bureau of Mines, geological mapping on the scale of one inch to a mile was extended to cover new areas and some important mineralised areas were mapped on larger scale maps. At the beginning of the Second Plan period about 24 per cent of the area of the country had been surveyed and mapped on the scale of one inch to a mile. During the Second Plan period, map coverage on this scale was extended to an additional 40,000 square miles and 5775 square miles of mineralised areas were mapped on larger scale maps. Detailed prospecting in parts of the Karanpura, Bokaro, Korba, Korea, Bisram-pur, Jhilimili, Kalakot, Talcher and Dharan-giri coalfields blocked out sufficient reserves of coal for establishing new mines in some of these fields during the Second Plan period. These investigations led to the discovery of a 70 to 90 feet thick seam in the Singrauli coalfield and of two seams, one 74 feet and the other 12 feet and 8 inches thick in the Ramgarh coalfield, the latter being of coking quality. Besides, the existence of the Dishergarh seam at an easily mineable depth, the coking Laikdih seam 20 feet thick in an unleased area in the Raniganj coalfield, the coking Barakar seam under the Barren Measures in the Jharia coalfield and the eastward extension under alluvium of the coal Measures of the Raniganj coalfield have also been established. Proving of iron ores in the Rajhara and Barsua areas helped in the establishment of new mines for the supply of iron ore to the Bhilai and Rourkela steel plants and the reserves proved in the Kiriburu area formed the basis of the Kiriburu iron ore project, which is to supply 2 million tons of iron ore annually for export to Japan. Detailed structural map-ing of the manganese ore deposits in Madhya Pradesh and Maharashtra has indicated that the reserves are much larger than estimated hitherto Surveys were carried out with a view to assessing the potentialities of the known and reported occurrences of non-ferrous metals, particularly copper, lead and zinc. Drilling and exploratory mining work done at Khetri (Rajasthan) and in Sikkim have proved the existence of about 28 million tons of copper ore (average copper content 0.8 per cent) in the Khetri area and about 0.35 million ton of ore containing on an average 6.24 per cent of copper, lead and zinc in Sikkim. The availability of substantial quantities of gypsum in Nagaur (Rajasthan), magnesite in the Almora district (Uttar Pradesh), pyrites in Amjor (Bihar) and limestone in the Shahabad district (Bihar) has also been indicated.

14. Table No. 4 gives a broad indication of the more important results of the investigations carried out during the last ten years :

* Provisional figures.; @Includes lignite from Jammu and Kashmir—4647 tons in 1960.; + Figures relate to calendar year 1951.;
N.A.—Not available.

Table 4 Estimate of reserves
(million tons)

  mineral as at the beginning of the First Plan as revised now remarks
coal     37300 50000 in addition there are inferred reserves of 80,000 million tons. about 40% being of marketable grade.
manganese ore     20 (high grade) 180
copper ore   Khetri no estimate 28 with an average copper content of 0 -8 percent.

with an average combined copper lead and zinc content of 6 '24 per cent.

    Sikkim no estimate 0-35
pyrites   Amjer no estimate 384 of which 8 million tons represents proved reserves and 68 million tons probable reserve*. Average sulphur content of the proved reserve* is 40 per cent.
    lngaldal no estimate 2.0  
gypsnm   Nagaur (Rajasthan) no estimate 1000
    Ramban (Jammii and Kashmir) no estimate 50
limestone   Shahabad district no estimate about 44 million tons of flux grade and 268 million tons of furnace grade.


chromite   Byrapur(Mysore) no estimate 0-7


iron ore   Kiriburu (Orissa) no estimate 173
bauxite   Jamnagar District (Gujarat) no estimate 6
magnesite   Almora (Uttar Pradesh) no estimate 12
apatite   . Singhbhum copper belt (Bihar) 0-7 1.8
lead and zinc


Zawar (Rajasthan) no estimate 10-7 with an average combined cad and zinc content of 3 percent.
bentonite   Barmer (Rajasthan). no estimate 10-0  


15. The greater emphasis laid on the expansion of industry during the Third Plan calls for an intensified programme of mineral exploration and development. The main objectives will be exploration of the country's mineral resources with a view to—

  1. locating workable reserves of minerals and metals, the requirements of which are being met today either wholly or partly by imports;
  2. proving additional reserves of minerals like iron ore, bauxite, gypsum, coal, limestone, etc., which can be developed to meet the expanding requirements of the economy; and
  3. proving reserves and establishing new mines for the production of minerals like iron ore which can be exported.

These objectives require an intensification in the coming years of geological mapping, a wider adoption of geo-physical and geo-chemical methods, and detailed prospecting of promising mineral occurrences so as to assess their extent and quality with a view to developing them.

16. The programmes of mineral development envisaged in the Third Plan, set out in the Annexures to Chapter XXVI on Industries, entail an outlay in the public sector of the order of Rs. 478 crores (including a foreign exchange element of Rs. 200 crores) and in the private sector of about Rs. 60 crores (with a foreign exchange component of Rs. 28 crores). The current allocations for industries and minerals in the public sector amount to Rs. 1520 crores as compared with total requirements of Rs. 1882 crores. This gap between the requirements and the actual availability of resources suggests that there will be a sizeable spill over into the Fourth Plan, and that some of the physical targets will not be fully achieved by the end of the Third Plan period. As explained in the Chapter on Industries (paragraph 24), it is difficult at this stage to indicate with any degree of accuracy which projects will get delayed,


17. Assessment of demand.—Having regard to the programmes for thermal power generation and railway development and the targets set for iron and steel, cement and other industries which are important consumers of coal, the demand for coal in the last year of the Third Plan is estimated at 97 million tons. In arriving at this estimate, allowance was made for (a) the effects of the programmes of electrification and dieselisation on the railways' requirements of coal, and (b) the use of washery middlings and lignite for thermal power generation.

18. The target of 97 million tons set for the Third Plan will require production to be stepped up by 37 million tons over the Second Plan target of 60 million tons. Though the latter has not been fully achieved, the necessary investments have been made for creating capacity commensurate with the target during the Second Plan period itself. Production during March, 1961, amounting to 5.27 million tons, was a little over the monthly rate required to achieve an annual output corresponding to the production target set for 1960-61.

19. During the Second Plan the contribution of the private sector towards additional production came from existing mines, whereas the major portion of the additional production in the public sector was from new areas. The increase required during the Third Plan is of such a magnitude that it will necessitate the opening of a large number of new mines, particularly in the public sector, both in areas which are already developed and in entirely virgin areas. This will call for a great deal of effort and of capital investment.

20. The steel plants and merchant cokeries are estimated to require 25 million tons and 2 million tons respectively of metallurgical coal. Conservation of the limited reserves of coking coal require the use to the extent possible, of blends of weakly coking or semi-coking coals with strongly coking coal thereby reducing the consumption of coking coal. A start in this direction has already been made. The Durgapur steel plant and the West Bengal Government's coke oven plant at Durgapur both use blends of semi-coking coal from Raniganj and coking coal from Jharia. Actual production of coking coal of superior grades (selected grades and grade-I) during 1960 was about 13 million tons and that of blendable coal about 2 million tons. On the basis that a part of the requirements of metallurgical coal industries will be met by blendable coal, the net additional output of coking coal and blendable coal required by the end of the Third Plan period are estimated at about 10 million tons and 2 million tons respectively. The net additional output of superior grades of non-coking coal required for the railways and other industries is estimated at about 10 million tons. The gradewise break-up of the production target of 97 million tons is given below :

(million tons)

selected-A 12-05
selected-B 18-87
grade-I 44-28
grade-II 15.97
grade-Ill 5-71
total 96-88

The most important objective of the coal programme during the Third Plan is to ensure that the necessary quantities of coking and blendable coals are made available to the steel plants and merchant cokeries and of superior grades of non-coking coal to the railways and other industries which necessarily require them. The additional raisings of these classes of coal will have to come mainly from the Jharia and Raniganj coalfields, with the public sector taking a more active part than hitherto.

21. Allocation of additional production.—In drawing up the programme and more particularly in deciding how much of the additional production should come from the private sector and how much from the public sector, the above mentioned objective and the following factors have been kept in view, viz. :

  1. the capacity of the private sector to expand production from their existing mines and areas nearby; and
  2. Government's policy which reserves to the public sector the establishment of new mines.

The capacity of the private sector to increase their output was assessed by a Working Group which, after examining the details of the expansion programme put forward by individual companies, assessed their capacity at 16.83 million tons. On this basis, the share of the public sector in the additional production of 37 million tons will be 20 million tons. The allocations of the additional production to the two sectors are not to be considered as rigid. The progress of the programmes will be kept under constant review so that adjustments can, if necessary, be made, the basic objective being to ensure that the total production planned is actually achieved.


22. Three million tons of the additional production in the- public sector are to be obtained by the expansion of the Sirigareni collieries in Andhra Pradesh. This is to be achieved by the expansion of existing workings and by sinking new shafts mostly in new areas. The balance of 17 million tons has to be raised by the National Coal Development Corporation. Prospecting of new areas with a view to increasing output in the Third Plan was started in 1958 and on the basis of the material collected so far the Corporation has formulated a programme for the production of an additional 18.5 million tons, the tentative fieldwise distribution of which is as follows:

Table 5 Fieldwise distribution of additiona production of N.C.D.C.

area (million tons)
South Balanda 1-0
Bisrampur 2-5
North Balanda 1-0
Jarangdih 0-2
Kathara (additional) 0-5
Kargali Bokaro (additional) 0.5
Sawang 0-3
Singrauli 2-5
Kamptee 1-5
Pench-Kanhan 1 -0
Charcha-Jhilimili . 1-0
West Bokaro 0-5
Ramgarh 1 -5
Korba (Ghordewa seam) 1-5
Raniganj (Block numbers VIII and IX) 0 -5
Raniganj (other blocks) 0-5
Dishergarh 0-5
Jharia 1 -5
total . 18.5


24. The break up of the additional production from the private sector as assessed by the Working Group is :

  • coking coal—4.87 million tons;
  • blendable coal—1.12 million tons; and
  • superior grades of non-coking coal—10.84 million tons.

The coking coal will come mainly from Jharia, the blendable coal from Raniganj and the non-coking coal mainly from the Raniganj field with smaller quantities from the Bokaro, Karan-pura and Madhya Pradesh fields. Besides estimating the additional production possible in terms of coking, blendable and non-coking coal, the Working Group gave the distribution of the additional production gradewise and field-wise and indicated a yearwise phasing of production. The major portion (11 million tons) of this additional production will be from existing mines and the balance from new sinkings in existing leasehold areas. The private sector's programme is estimated to involve a capital outlay of the order of Rs. 60 crores with a foreign exchange component of Rs. 28 crores.

25. From the gradewise break-up of the target of 97 million tons indicated in paragraph 20 above, it will be seen that the proportion of interior grades is very small. The demand for inferior grades which are used, among other things, for brick burning and domestic purposes cannot be forecast with as much precision as that for the better grades which are required by the major consumers. Production of the inferior grades can, however, be stepped up comparatively cheaply and quickly as they are largely obtained from open quarries and in their case it is transport rather than the ability to increase ra'sings which is likely to be the limiting factor. The fieldwise distribution of the additional production of both private and public sectors programmed together is given in the Table below :

Table 6 Fieldwise distribution of additional production of coal (public and private sectors)

fields coking (million tons)
blend-able non-coking total
Raniganj 0-35 1 -62 8-66 10-63
Jharia 5-84 5-84
Bokaro 1 -68 0-33 2-01
West Bokaro 0-50 0-50
Ramgarh 1 -50 1.50
Karanpura 0-42 0-42
Madhya Pradesh
Pench-Kanhan 3.43 3-43
Bisrampur 2-50 2-50
Charcha-Jhilimili 0-50 0-50 1.00
Singrauli 2-50 2-50
Korba 1.50 1.50
Maharashtra : Kamptee 1.50 1.50
Orissa : Talcher 2-00 2-00
Andhra Pradesh :
Singareni 3-00 3-00
total 9-87 2-12 26-34 38-33

26.,Viewed in the perspective of the future requirements of coking coal for steel production, the reserves of coking coal as known today are rather limited—they are only of the order of 2800 million tons—while there are very large reserves of high grade iron ore. This situation calls for the adoption of measures which will, on the one hand, conserve the limited supplies of coking coal—measures such as stowing, washing and blending which will have the effect of extending the life of the reserves— and on the other, economise its consumption. The use of sintered ore in blast furnaces besides making use of iron ore fines, which would otherwise go waste, also tends to reduce the consumption of coal per ton of steel produced. While other measures of conservation are already being adopted, there would appear to be need for more widespread use of sintered ore than at present. The technical feasibility of agglomeration to render iron ore fines suitable for use in steel plants or for export, the economics thereof and the extent to which this method can be adopted in practice are being examined by a committee appointed by the Government.

27. The trend in gradewise production of coal during the last few years discloses a tendency for an increasing proportion of total production to consist of grade-I and inferior grades of coal. The table below relating to the West Bengal and Bihar coalfields brings this out very clearly.

Table 7 Trends in gradewise production of coal from West Bengal, Bihar coalfields
(million ton)

year selccted-A selected-B gradc-I grade-II grade-Ill tota
1951 7-203 9-404 5-080 4-501 2-028 28 -216
1955 7-168 10 -276 6-309 5-415 1-570 30 -738
1956 6-826 10 -396 6-988 5-296 1-842 31 -348
1960 7-457 9-900 14 -336 5 -958 3-210 40-861

The total production increased from 28.2 million tons in 1951 to 40.86 million tons in 1960 but production of selected 'A' increased only from 7.2 to 7.5 million tons and selected 'B' from 9.4 to 9.9 million tons (even though during 1955 and 1956 it rose to 10.3 million and 10.4 million tons respectively). The production of grade—I rose from 5.1 million tons to 14.3 million tons, grade—II from 4.5 to 6 million tons and grade—III from 2.0 to 3.2 million tons. Tills tendency is attributable partly to the gradual exhaustion of the more easily workable reserves of selected grades of coal and the discontinuance of selective mining and partly to the increasing mechanisation of mining operations. By the end of the Third Plan period, the proportion of Grade—I and inferior grades of coal to total production will increase much more rapidly than that of selected grades. In view of the increasing difficulty in stepping up the output of the better grades of coal, there is an urgent need for economy in their use. The Fuel Efficiency Committee of the Coal Council, after taking into account all the technical aspects of the fuel requirements of each industry and having regard to the need for economy in the use of superior grades of coal, has laid down the types, grades and sizes of coal that should be supplied to different industries.

28. Stowing.—Stowing as a measure of conservation will need to be intensified during the Third Plan period since a part of the additional production is to come from existing mines by depillaring operations. While the larger collieries have their own arrangements for gathering sand and transporting it, for technical and financial reasons the smaller collieries are not able to establish these facilities. With a view to removing this handicap and to increasing the supplies of sand for stowing purpose, the Coal Board will establish seven ropeways, four in the Jharia coalfield and three in the Raniganj coalfield. Sand will be gathered from the Damodar and Ajai rivers and transported to points within convenient reach of groups of collieries which have been selected with due regard to the urgency of stowing operations, the quality of coal, etc. The cost of these ropeways has been tentatively estimated at Rs. 16 crores. The ropeways are programmed to be completed within the first two years of the Plan period, but this time-schedule may be upset by foreign exchange difficulties.

29. Technical personnel.—The Production and Preparation Committee of the Coal Council estimated the requirements of managerial personnel (degree-holders in mining engineering) at 3000 and of junior personnel at 37000. In addition, a certain number of engineering personnel (electrical, mechanical and civil) and technicians will also be required. The 3000 managerial personnel indicated above may be taken to represent the requirements of both coal mining and metalliferrous mining.

30. At the beginning of the Second Plan there were only two institutions, viz. the College of Mining and Metallurgy, Banaras, and the Indian School of Mines and Applied Geology, Dhanbad, which provided facilities for a degree course in mining. The capacity of these two institutions was doubled in 1956-57. In addition, five Engineering Colleges and the Indian Institute of Technology, Kharagpur, have instituted courses in mining, each with an intake varying from 25 to 30 students per year.

31. The Chief Inspector of Mines has agreed to a certain measure of relaxation of the Coal Mines Regulations and also to the holding of two examinations annually for the grant of Mines Managers' Competency Certificate instead of one examination as at present. With the adoption of these measures, the requirements of managerial personnel will be more or less met. In regard to junior technical personnel, the establishment by the respective State Governments with central assistance of fourteen institutions for conducting the National Certificate Course in mining and mine surveying has been approved. Proposals are also under consideration for the starting of evening mining classes in the States of West Bengal, Madhya Pradesh, Bihar and Orissa—West Bengal and Bihar already have evening mining classes, but they need to be reorganised with a view to bringing them to the level of the Natioal Certificate Course.

32. The National Coal Development Corporation is running five training schools. These schools, the capacity of which has recently been practically doubled, will be sufficient to meet the requirements of the Corporation for at least the first three years of the Plan period. The Singareni collieries have introduced an apprentice scheme for various trades. In the private sector of the industry, a few of the bigger groups of collieries have regular schools of their own where apprentices are taken and given training in different categories of jobs. In the context of the large additional production which the private sector is to raise during the Third Plan some more facilities may require to be established and a certain measure of uniformity brought into the course of training.

33. Transport.—The concentration of coal production in the Bengal-Bihar coalfields poses serious problems of transport because coal has to move to consumers distributed all over the country. While the seriousness of the problem can be mitigated to some extent by increasing production in outlying coalfields, this cannot offer a complete solution of the problem as the better grades are not found in abundance outside the Bengal—Bihar coalfields. particularly the Raniganj field. The large increase in the coal production programme during the Third Plan will further increase the pressure on the railways for moving coal to distant consumers. The capacity of the railways is being increased but, with a view to reducing pressure on rail transport, it will be nedessary (a) for consumers situated near coalfields, to move coal by road, and (b) to take steps to increase the quantity of coal moved by the rail-cum-sca route to consumers ia southern and western India. Proposals for giving: effect :to such measures are under examination. The feasibility of consumers in Western and Southern India changing over to the use of furnace oil instead of coal, is also under consideration.

34. Coal washeries.—The steel programme included in the Second Plan required the establishment of capacity for washing 11.63 million tons of raw coal (8.1 million tons ia terms of washed coal). Part of this capacity—6.03 million tons (4.1 million tons in terms of washed coal)—has already been established. The balance of washing capacity programmed under the Second Plan is expected to be established in full by the middle of 1963.

35. The expansion of steel production envisaged in the Third Plan is tentatively estimated to require an additional washing capacity of 12.7 million tons in terms of raw coal. This capacity has been arrived at after making allowance for blendable coal from the Dishergarh and Baraker Measures of the Raniganj field and blendable coal from Jhilimili which will be used directly without washing. This additional capacity is proposed to be established partly by the expansion of washeries already in existence or in course of erection, viz. doubling the capacity of the washeries being set up at Dugda and Bhojudih. This will take care of 3.2 million tons. The balance of washing capacity will be obtained by establishing two new washeries at Kathara (3 million tons), which will draw supplies from the Kathara mine, and from the Jarangdih, Sawang and Kargali deep mines; two washeries at Karanpura (3.5 million tons), which will draw supplies from collieries working the Argada and Sirka seams; and a washery in Central Jharia (3 million tons), which will be fed by the new mine to be opened in the Jharia coalfield by the National Coal Development Corporation. The washeries at Karanpura will be of a dual purpose. Washed s'ack coal will be supplied to the steel plants, while the washed steam coal will go to meet the requirements of the railways. Expansion of the washing capacity at Bhojudih and Dugda is not expected to involve any difficulty as the washability characteristics of most of the coal from the areas from which they will draw their supplies are already known. In the case of the washeries at Karanpura and Kathara, data for formulating preliminary project reports are being collected. The washery in Central Jharia will probably come into existence only towards the end of the Third Plan period as it will take sometime before the new mine is established and the washability characteristics of the coal ascertained. In addition to the above a washery is being planned to be set up as an integral part of the West Bengal coke oven plant at Durgapur.

36. Besides the above mentioned washeries which are mainly meant to cater for the requirements of the steel plants, the Plan includes washeries for non-coking coal required for use by the railways. The washing of non-cokmg coal is becoming necessary because of the gradual deterioration in the quality of coal mined today and the difficulty in getting adequate supplies of non-coking coal of superior grades. Unlike coking coal, non-coking coal is comparatively difficult to wash and data on the washability characteristics of these coals are rather scanty. Besides, the yield of washed steam coal for use by the railways will be much less than the yield of clean coal in the case of coking washeries. The programme, therefore, provides for detailed investigations of the washability characteristics of non-coking coal drawn from different collieries and a study of the economics of washing such coal. It is envisaged that the establishment of these additional washeries will be taken up when preliminary studies are over and the economics of washing such coals is established. Tentatively a capacity of 7 to 8 million tons (in terms of raw coal) is visualised.

37. Neiveli Lignite Project.—The project for the integrated development of the lignite deposits at Neiveli in South Arcot District (Madras) included in the Second Plan envisaged :

(i) an annual output of 3-5 million tons of raw lignite to meet the requirements of—

  1. a thermal power plant with a capacity of 250 M.W.,
  2. a fertiliser plant for the production of 70,000 tons of fixed nitrogen in the form of urea and
  3. a briquetting and carbonisation plant for producing 380,000 tons of carbonised briquettes; and

(ii) a clay washing plant for the production of 6000 tons per annum of white China and ball clay.

The surplus power available after meeting the requirements of the constituent units of the integrated project is to be fed into the State electricity grid.

The mechanical removal of over-burden using both conventional and specialised types of machinery has reached an advance stage and production of lignite will commence by the end of 1961 in time to meet the requirements of the first unit of the thermal power plant. Production will be gradually stepped up thereafter to the target of 3-5 million tons visualised in the Second Plan as the other units of the thermal power station and the fertiliser and the briequetting and low temperature carbonisation plants are brought into commission.

The Third Plan envisages (a) the completion of the programmes included in the Second Plan, (b) expansion of thermal power capacity by 150 M.W. and (c) stepping up of the output of lignite from 3-5 millioa tons envisaged in the Second Plan to 4-8 million tons in order to meet the fuel requirements of the expanded thermal power plant. Item (b) above, which is estimated to involve a capital outlay of Rs. 15 crores with a foreign exchange component of Rs. 9-93 crores, is dealt with in paragraph 54 of the Chapter on Irrigation and Power. The expansion of mine output is estimated to cost Rs. 3-8 crores (with a foreign exchange element of Rs. 1.45 crores) mainly for the purchase of an additional unit of specialised mining equipment. This equipment will be sufficient to raise the output of lignite to 6 millon tons which will be needed in due course to feed the proposed high temperature carbonisation plant for the production of lignite coke, vide paragraph 40 of the Chapter on Industries.


38. The programme relating to mineral oil envisages (a) exploitation by the Oil India of the reserves proved in their leasehold areas in Assam, (b) further exploration by the Oil and Natural Gas Commission to locate and prove reserves of oil and establish additional production, (c) the completion of the refineries under construction at Gauhati and Barauni respectively, and establishment of a new refinery in Gujarat with a capacity of about 2 million tons, (d) establishment of pipelines for the transport of petroleum products, and (e) establishment of facilities for the distribution by Government agency of the products of the public sector refineries and the deficit products imported on favourable terms, Item (c) above is dealt with in paragraph 86 of the Chapter on Industries.

39. Additional wells will be drilled by Oil India in order to establish a sufficient number of production wells to feed the public sector refineries that are being established at Gauhati (Nunmati) and Barauni. Government's share of expenditure on this account is estimated at Rs. 1 -4 crores during the Third Plan. The drilling programme and the laying of the pipelines will be so phased as to fit in with the time-schedule for the completion of the refineries. The programme envisages stepping up production of crude oil from Oil India's areas in Assam beyond 2-75 million tons per annum if additional reserves are proved in these areas. In that event or in the event of commercially workable reserves of oil being discovered in other areas of Assam, the capacity of the oil pipeline at present under construction may have to be increased so as to handle a large throughput. This has been borne in mind in designing the pipeline.

40. Even after Oil India has achieved full production from the Nahorkatiya area at the rate of 2-75 million tons per annum, the crude oil available from indigenous sources will fall far short of the country's needs. Intensive search" for fresh oil reserves is, therefore, called for. In the Second Plan Government embarked on oil exploration on its own account through the agency of the Oil and Natural Gas Commission. The work of the Commission has led to the discovery of oil and gas in the Cambay-Ankleshwar area of Gujarat and the Sibsagar area in Assam. In the Third Plan, the Commission will operate on a larger scale with a view to proving oil reserves and establishing additional production.

The programme for the Third Plan envisages an expenditure of Rs. 115 crores as against only Rs. 26 crores in the Second Plan and will cover most of the promising sedimentary areas in the country, including the Cauvery basin. But the main effort, to begin with, will be concentrated on drilling in the Cambay-Ankleshwar and Sibsagar areas so as to establish production from the oil deposits discovered there. In the c'ase of areas in which reserves of oil are proved and have been brought to the stage when production can start, funds required for developing production and pipelines will be provided in accordance with the requirements as assessed from time to time.

Government have also decided to invite foreign oil explorers to join in the search for oil in India subject to mutually acceptable terms. One of the offers received is from the Burmah Oil Company (BOC), and a new basis for collaboration in the exploration and production of oil in Assam has been negotiated with this Company. The Government and the BOC will now become equal partners both in the share capital and in the management of Oil India (previously the Government had only a one-third share). As reconstituted, the company will operate in the existing areas of Nahorkatiya, Moran and Hugrijan as well as in a new area of 1886 square miles lying to the north-east of the existing area. Refining and marketing operations will continue to be the responsibility of the public sector, but supplies of crude oil to the Digboi refinery, which is owned by the Assam Oil Company, a subsidiary of BOC, have been assured to the extent that the D!gboi fields cannot meet the requirements of that refinery. Oil India will afford the maximum possible employment and training facilities for Indian personnel and BOC will train Indians abroad in all fields of the peti oleum industry at Oil India's expense.

Other offers received from foreign companies in response to the Government's invitation are under examination.

Trial production of crude oil at a daily rate of 1500 tons is expected to start by December, 1961 in the Ankleshwar area, and the estimated reserves would be able to sustain an annual production of 2 to 2-5 million tons. By the end of the Third Plan period indigenous production of crude oil is likely to reach a level of 6-5 million tons, and total production of indigenous crude oil would approximately be 18 million tons during the Third Plan period.

41. Oil distribution—The Indian Oil Company, the Government agency set up in 1959 to undertake the distribution and marketing of oil products, has already concluded a four-year contract with the U.S.S.R. Export Organisation for the import of 1 -9 million tons of deficit products, primarily kerosene and high speed diesel oil over that period. Similar imports are likely to be made from Rumania under corresponding trade agreements. To reduce the outgo of free foreign exchange on the import of deficit petroleum products, every effort will have to be made to increase such imports under rupee payments through the Indian Oil Company. In addition, the company will handle the distribution (directly or through quantitative equivalents by product exchange arrangements with other distributing companies) of the output of the two public sector refineries under construction and later of the third refinery projected in Gujarat. An investment of Rs. 10 crores is envisaged on the distribution programme during the Third Plan period.

42. Products pipelines.—The Plan visualises the construction of pipelines for transporting petroleum products from the refinery point at Barauni to consuming centres west of it and to Calcutta. Steps are being taken to get a project study made of the technical and economic aspects of the proposition. The pipelines visualised are estimated to cost Rs. 37 crores.


43. On the basis of the target for iron and steel envisaged by the end of the Third Plan, the iron ore requirements are estimated at 20 million tons. In addition, iron ore has to be made available for export. Increasing interest is being shown in iron ore supplies from India by Japan and a number of countries in Europe. An agreement has been signed between the Government of India and Japan for the export of 2 million tons from the Kiriburu area and an additional 4 million tons from the Bailadila area in Madhya Pradesh. This will be over and above the current level of exports of about 2 million tons. Allowing about 2 million tons for export to other countries, the total requirements for export would be of the order of 10 million tons. To meet the requirements of domestic industries and this export target a capacity target of 32 million tons has been fixed for iron ore in the Third Plan.

44. The requirements of the Bhilai and Rour-kela steel plants will be met from the mines that have been opened for the purpose during the Second Plan period. The capital cost of stepping up production from these mines to meet the expanded requirements is included in the cost of the expansion of these two steel plants. In the case of the Durgapur steel plant, the mine thal has been developed during the Second Plan may not be able to meet the expanded requirements and it may become necessary to draw supplies of additional iron ore from the Kiriburu mines which are being developed to meet the export commitments to Japan. The target for the Bailadila project which was originally envisaged at 4 million tons has, therefore, been increased to 6 million tons. When the Bailadila mine is brought into full production, the export commitments to Japan will be met wholly from the area, thereby releasing the capacity at Kiriburu for meeting the requirements of the Durgapur steel plant. The iron ore requirements of the new steel plant at Bokaro will also have to come from the Kiriburu area either by expanding the capacity of the mines that are being developed or by establishing new mines nearby.

45. The Kiriburu iron ore project which is being developed with assistance from Japan is expected to start production in 1963. The Bailadila iron ore deposits are being prospected and a new mine for an ultimate production of 6 million tons per annum will be established and brought into production towards the close of the Plan period. This project, which is estimated to cost Rs. 17 crores, is also being developed with assistance from Japan. The expansion of output from Kiriburu which is estimated to cost about Rs. 6 crores will be so phased as to be ready to meet the requirements of the new steel plant at Bokaro when it is established.

46. Besides the above-mentioned projects, an additional production of 0.5 million tons from the Redi area (Maharashtra) by the National Mineral Development Corporation, 0-5 million tons from the Sukinda/Daiteri area by the Orissa Mining Corporation, and 1 million ton from the BelIary-Hospet area and along the West Coast by the Board of Mineral Development, Mysore, is also envisaged.


47. Copper projects.—Domestic production of copper is only of the order of 8000 tons per annum as compared with a current demand of the order of 70,000 tons, which is tentatively estimated to increase to about 150,000 tons by 1965. The major portion of the current demand for this metal is met by imports and unless domestic production is stepped up increasingly larger quantities will have to be imported.

48. Detailed work in the Khetri-Daribo area of Rajasthan and Rangpo area of Sikkim has established substantial workable reserves of copper ore—about 28 million tons with an average copper content of 0-8 per cent in Khetri and about 0-35 million tons averaging about 6-24 per cent of combined copper, lead and zinc in Rangpo; the occurrence in Daribo is richer in copper but the extent of the reserves are yet to be fully proved. The reserves proved in Khetri and those indicated in Daribo are considered adequate to feed a smelter with a capacity of 11,500 tons of electrolytic copper per annum. The Plan includes a project with an estimated capital' outlay of Rs. 12-5 crores for the mining and concentration of the ore at Khetri and Daribo and smelting the concentrates at a smelter to be established at Khetri.

49. The reserves estimated to be available at Rangpo though richer in grade, are comparatively small in size. These are to be exploited by the Sikkim Mining Corporation, a joint venture of the Sikkim Durbar and the Government of India. The ore mined will be concentrated at the mine and will be railed to be smelter at one of the smelters in the country. The project is estimated to involve a capital outlay of about Rs. 2-5 crores.

50. Pyrites-Sulphur Project.—In the absence of workable deposits of elemental sulphur within the country attention has been focussed on pyrites as an alternative source of sulphur. Reserves of about 8 million tons of pyrites averaging about 40 per cent sulphur have been proved in the Amjor-Ghoga area in the Shahabad district (Bihar). The probable and possible reserves are estimated at 384 million tons. A project is being worked out for winning of about 84,000 tons of sulphur from pyrites.

51. Panna Diamond Project.—Preliminary work having given promising indications, the diamond bearing areas of Panna and adjacent regions in Madhya Pradesh are being prospected in detail with a view to establishing production of diamonds of the gem and industrial variety. The project is estimated to entail an outlay of Rs. 1-5 crores.

52. Manganese ore beneficiation project.—A large part of the manganese ore reserves available in the country are poor in quality. In addition, in -the course of mining and grading the ore for export a certain proportion gets rejected as unmarketable. The dumps accumulated at the mines contain considerable quantities of this material. To conserve the rather limited reserves of high grade ore it has become necessary to set up facilities for the beneficiation of this material, and the Plan includes a project for this purpose with an cslimaier! outlay of Rs. 5 crores.

53. Gold.—The Plan envisages a programme for further exploration and exploitation of the gold deposits in Kolar. In the Hutti gold mines the exploratory operations which are presently under way are expected to reach a concluding stage during 1962-63. The question of undertaking expansion of the mining and milling capacity to a thousand tons per day will be considered then in the light of the data that become available.

54. Development of atomic minerals.—In connection with the project for the establishment of an atomic power station, the PJan envisages the provision of faci'ities for the mining of uranium ore, the extraction of uranium and its processing to atomically pure metal or compound, and for the extraction of plutonium from fuel elements at an estimated cost of Rs. 24 crores.


55. The requirements of coal aim iron ore for the programmes included in the Third Plan have been dealt with elsewhere. On the basis of the capacity envisaged for the different industries under the Third Five Year Plan the demand for mineral raw materials will increase. An estimate of the requirements of the more important minerals for domestic industries and an indication of the quantum of export visualised in the case of manganese ore are given below :

(million tons)

  domestic requirements export
manganese ore 0-5 1-5
bauxite 0-45  
gypsum 2-1*  
limestone 29 -8**  


56. While progress has been made on the survey of the country's mineral resources and good use has been made of the results obtained during the last ten years, the rapidly increasing demand for mineral raw materials requires that such surveys and investigations should be further intensified. The expansion of steel production has focussed attention on the need to locate fresh reserves of flux grade limestone and of dolomite and other refractory materials. Likewise, there is an urgent need to locate further workable reserves of non-ferrous metals like copper, lead and zinc, which are at present largely imported, and of bauxite, the demand for which will increase with the expansion of the aluminium industry. These urgent requirements call for a further expansion of the Geological Survey of India and the Indian Bureau of Mines and the Third Plan envisages a further expansion of these two organisations at an estimated cost of Rs. 10 crores and Rs. 5 crores respectively.

57. The Programmes of these two departments envisage both extensive and intensive investigations. The main objectives of their programmes are :

  1. Extension of the geological map coverage as quickly as possible—about 170,000 square miles are proposed to be covered during the Third Plan;
  2. Intensive investigation of the known and reported occurrences of copper, lead and zinc. Besides studying the occurrences of these metals in a preliminary way during the course of geological mapping, the more promising ones will be mapped on a larger scale and investigated by geophysical methods and by drilling. The Base Metals Division of the Geological Survey of India will be expanded ;
  3. More detailed surveys and investigations followed, if necessary, by structural mapping and drilling, of deposits of other minerals like bauxite, gypsum, iron ore, manganese ore, chromite, graphite, limestone, etc. ;
  4. Further application of geophysical and geochemical methods to the investigation of non-ferrous metals and ground water resources ; and
  5. Regional prospecting by the Geological Survey of India and detailed prospecting by the Indian Bureau of Mines of selected coalfields in connection with the coal programme during the Third Five Year Plan and to meet the needs of the subsequent Plan periods.

58. The more important items included in their programmes are set out below :

Coal.—Detailed investigation followed by drilling of Singrauli, West Bokaro, Jhilimili, Pench-Kanhan and Singareni coalfields and of selected blocks of Raniganj and Jharia coalfields, in connection with the programmes in the public sector and regional mapping and drilling of Sonhat, Sohagpur, North Karanpura, Kalakot coalfields for purposes of qualitative and quantitative assessment.

Iron Ore.—Structural mapping of the iron ore belt in Bihar and Orissa and large-scale mapping followed by drilling of the deposits in Baila-dila (Madhya Pradesh), Salem (Madras), Tum-kur, Chitaldrug and Bellary-Hospet (Mysore).

Manganese Ore.—Exploratory drilling of the deposit in Panchmahals and selected areas in the manganese ore belt in Madhya Pradesh and some detailed studies of the deposits in Orissa and Rajasthan.

Chromite.—Detailed investigations of the deposits in Jojuhath (Bihar), Hassan and Mysore districts (Mysore), Cuttack, Keonjhar and Dhen-kanal districts (Orissa).

Bauxite.—Detailed investigation of the deposits in Kaira and Jamnagar district (Gujarat), Kolhapur (Maharashtra), Belgaum (Mysore),

*This includes estimated requirements of Sindri Fertilisers, the proposed fertiliser factory at Hanumangarh and the ement target of 15 million tons.
* Includes the requirements of cement, steel, and ferro-manganese industries and a lumpsum estimate for the require ments of other miscellaneous industries.

Amarkantak (Madhya Pradesh), Ranchi and Palamau districts (Bihar).

Limestone.—Search for flux grade limestone in Bihar, Madhya Pradesh and Orissa and investigation of limestone deposits in Mirzapur dsitrict (Uttar Pradesh).

Copper, Lead and Zinc.—Detailed mapping geophysical investigation and drilling of the deposits in Cuddapah-Kurnool and Nellore districts (Andhra Pradesh), Hazaribagh, Santal Parganas and Monghyr districts (Bihar), Jubbulpore and Bastar districts (Madhya Pradesh), Panchekani (Sikkim), Almora and Garhwal districts (Uttar Pradesh), Udaipur district (Rajasthan), Riasi (Jammu and Kashmir) and Manipur.

Magnesite.—Detailed investigation of magne-site deposits in Almora (Uttar Pradesh) and Salem (Madras).

59. The programmes of the Geological Survey of India and the Indian Bureau of Mines in addition to providing training facilities for postgraduate students in applied geology and mining also envisage an exchange of personnel between universities and the Geological Survey of India with a view to enabling university teachers to gain field experience and the Geological Survey Officers to refresh their theoretical knowledge.

60. States' programmes.—In addition to the programme of mineral surveys to be undertaken by the Central Government, the plans of State Governments envisage the strengthening of their Directorates of Mines and Geology and the exploitation of certain mineral deposits. Among the more important items included therein are the exploitation of the lignite deposits in Palana (Rajasthan), coal in Kalakot (Jammu and Kashmir) and iron and manganese ores in Mysore.

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