How To Start A Mining Business In India (And Small Business Opportunities)

Are you looking for a new business opportunity? Then you can think about starting a mining company. According To InvestIndia, The mining industry in India was valued at $41.7 billion in 2014-15 and is estimated to reach $125 billion by 2025. Moreover, Mining contributes significantly to the Indian economy.

It usually requires extensive capital to start a mining company anywhere in the world and so it is in India, but you can receive amazing rewards from it at the end of the day. Also, there are many small businesses in the mining industry, which require fewer resources and capital. We will be focusing on them as well.

Small Business Opportunities

According to Wikipedia, Mining carried out on small scale contributes 6% to the entire cost of mineral production in India. Also, The Indian mining industry which ranges from large scale mineral drilling businesses to small scale equipment leasing businesses provides jobs to around 7 lakh individuals. Starting a mining business doesn’t necessarily mean that you should acquire a mineral mining region such as a quartz mine in Rajasthan. However, you will be able to provide a range of other services to small and large mining industries, which are essential for mining.

There are small to medium scale services and businesses in the mining industry, which require less capital and resources to be profitably functional and can help mining industries. Some of them are:

A) Equipment Based Services

1. Equipment Sales: Mining requires lots of different types of tools and machinery. By dealing in equipment sales, you can choose the type of equipments or machinery you want to trade and build a business around it.
   
   
2. Equipment Leasing Services: If you want to set up equipment based business on a small to medium scale, you can set up equipment leasing services.
   
   
3. Equipment Repairing Services: To start this type of business, you require much less capital and resources. You would mostly need highly skilled labor to start equipment repairing services.

B) Transportation Services

1. Logistic Services: Transporting minerals from mining sites is a huge challenge for any mining company. The mined minerals are loaded in huge trucks, rails or ships from the remote mining sites and sent to the industry for processing. You can start a transportation service to help mining industries with mineral transportation. At UCM LLP, we use local transportation services for transporting quartz from different mines to our industrial plant in Kishangarh.
   
   
2. Labor Transportation Services: Mining companies need to work in remote areas such as ocean beds, deserts or forests. Labors and staff are required to be transported to such remote areas via helicopters, boats or ships. You can think of providing offshore transportation services.

C) Drilling Services

1. Borehole Drilling Services: Sometimes Boreholes are drilled in order to mine the minerals. In such cases, high-pressure water jets are used to extract the minerals. By specializing in Borehole Drilling services, you can help the mining companies with mining through hydraulic channels.
   
   
2. Mineral Exploration Services: Exploration is a popular niche in the mining industry. Mineral Explorers help the mining industries in locating mineral rich areas.

D) Consulting Business

1. Recruitment Consultants: It is difficult to find the right employees for the mining industry and the traditional recruitment agencies usually can not help in recruiting specialized labors or staff for the mining industry. Hence you can open your own Mining Recruitment Consultancy.
   
   
2. Financial Consulting: Financial consultants help the mining industry is seeking the right mining opportunities and earning a profit in the long term. They have financial consultants and analyzers who help the mining company in cost-effective and profitable mining.
   
   
3. Project Consulting: Mining is carried out in different areas and changing the locations often can be daunting for the miners. In such cases, the company often takes help of mining consultants who help with the A-Z of the mining project and provide different information such as geological information, mineral information, exploration information and other information which is essential for mining minerals effectively.

E) Technological Services

1. Software Development & Maintenance
2. Equipment Testing
3. Data Mining
4. Blogging

F) Other Services

1. Waste Management Services
2. Medical Services
3. Brokerage
4. Risk Assessment Services
5. Power Supply
6. Temporary Development
7. Security And Safety

Mining companies are in need of these services to move forward with their business operations. Therefore, you will be able to offer them one or many of these services and make a decent amount of money. Since the mining companies don’t hesitate before they go ahead with massive financial transactions, you need to make sure that you document everything legally.

What is needed to start a mining company?

You should do heavy research before you start a mining business. During the research, you will need to speak to the right people and gather all the information needed to start business operations.

If you are thinking about drilling and manufacturing minerals, You should initially learn how to register your mining business. Then you will need to focus on how to supply and export the mined products in the local market. The export of minerals is generally essential for any minerals manufacturing industry. That’s where you need to take a look at the export license and the regulations associated with it. Export licenses are not too difficult to acquire if you are exporting mineral products because any government and likewise the Indian government usually encourages the export of most minerals because of an increase of foreign currency in the domestic government reserves.

At Unique Crystal Minerals LLP, a large scale quartz manufacturer in Rajasthan, We have been exporting quartz globally for the last many years, and we have not faced any major difficulties with Indian government norms or regulations. We are also proud to be one of the largest quartz exporters in India.

If you are not looking forward to drilling for the mineral directly, you can get in touch with mining companies and ask for the issues that they face. Then you will be able to provide the previously listed services, which mining companies can use to overcome the problems.

Mining Equipment

Once you decide to go ahead with mining, you should purchase appropriate mining equipment. This is where you should think about getting the best quality industrial pumps, drills and construction vehicles. At Unique Crystal Minerals LLP, we use most of the vehicles from JCB. We also rent some of the machinery to reduce expenses. These aren’t all the tools. You can get in touch with a professional service provider and figure out what tools you need. You can also learn more about them from the research you do. However, you must also make sure that you don’t go over your budget at the time of purchasing tools.

Hiring Employees

Once you purchase tools, you need to hire skilled employees to work for your mining company. You will need to hire a lot of people due to the nature of the work that you have to do. A lot of employees will be working for a manual labor job, who can assist you mine materials. However, you will also come across the need to hire experienced employees.

After hiring employees, you will have to provide them with accommodation near the mining site. You can find accommodation or build accommodation for them in a nearby town. In addition to that, you will also need to develop an office, where you can manage all administrative work.

Health And Safety

You should understand what health and safety measures you need to practice before you start the mining business. You should also provide appropriate training to all employees on how to use the tools and how to ensure their own safety.

How to make profits from the mining business?

Now you are all set to go ahead with your mining business. This is where you should understand how to make profits out of your business. There is a high possibility for you to make profits out of your business because you will be spending a relatively little amount of money on mining the minerals needed. You just need to mine minerals and sell them in the market at a higher price tag.

To maximize profits, you can figure out what the high demand minerals available for you to mine are. Then you will be able to receive higher profits out of what you sell. Minerals that generate higher profits are changing along with time as well. Therefore, you need to make sure that you have an up to date knowledge about them.

You will also have to come across a lot of challenges when you are managing the mining business. If you can strategically plan to overcome those challenges, the mining company you create can provide you with rewarding results at the end of the day.

Mining Challenges

There are many problems that you may face while starting a mineral mining business. From extensive capital to fluctuating mineral prices and from resource nationalism to frequently changing government policies, Drilling Minerals is definitely not for the weak-spirited person.

1) Initial Costs & Contacts

The costs required to set up a mineral mining business is quite high. You would need heavy capital for purchasing or leasing different equipment, hiring experienced labor, build relevant infrastructures such as processing plants, energy plants, and transportation models. In India, it’s very difficult to acquire mining licenses without contacts at different government levels.

2) Skilled Labour & Staff

Mining business requires highly skilled labor and staff to operate efficiently. Also, many people are not willing to work at mines or remote areas due to health hazards, accidental risks and low quality of life.

3) Fluctuating Mineral Prices

Mineral prices depend on different factors such as demand and supply, the cost of production, the global economy, etc. Varying mineral prices may make it difficult to always trade the minerals profitably.

4) Water

Water is important for mining minerals at several sites. Such mining is usually carried out through hydraulic channels. Lack of water and implausibility of borehole drilling makes mining challenging in several areas in India.

5) Power Supply

It requires a huge amount of power supply to power the mining equipment. Lack of power supply in certain mining areas makes it difficult to mine minerals.

6) Government Regulations

With changing government policies, sometimes it gets really difficult to acquire a license to operate on a mine. Also, the government imposes certain rules and regulations for its own control of mines. This is popularly known as Resource Nationalism.

Some other challenges include

1. Ensuring Worker safety and all legal procedures pertaining to them.
2. Ensuring the waste is managed properly and the surrounding environment has not been harmed.

Conclusion

Starting a mineral mining business in India or anywhere in the world is interesting but quite challenging at the same time. Although if you are interested to start a business in this field, you can look at smaller business opportunities as well. If you are not well acquainted with the mining industry, you can start by providing smaller services required for the mining industry and then, later on, switch to drilling and mining minerals. You can contact me personally if you are interested in setting up a quartz manufacturing business in Rajasthan or nearby areas.